L&T in Talks With Itochu for Minority Stake in Clean Energy Arm as Kandla Ammonia Project Targets Exports

Larsen & Toubro (L&T) is in discussions with Japan-based Itochu Corporation for a minority investment in its wholly owned clean energy subsidiary, L&T Energy GreenTech Ltd (LTEGL), as the company develops a large-scale green ammonia project at Deendayal Port in Gujarat.

The proposed equity participation is being discussed alongside a long-term green ammonia offtake agreement between the two companies. Subramanian Sarma, Deputy Managing Director and President of L&T, said the group was discussing equity participation with Itochu in addition to the offtake agreement. He did not disclose the potential size of the stake.

Kandla project targets 300,000 tonnes of green ammonia annually

LTEGL is developing a green ammonia production facility with a planned capacity of 300,000 tonnes per annum at Deendayal Port, formerly known as Kandla Port.

L&T acquired land at the port in 2025 for green hydrogen and green ammonia projects. The company’s FY26 annual report identifies the location as a strategic export hub for green hydrogen derivatives.

The Kandla development forms part of L&T’s broader clean energy portfolio and is being structured around access to port infrastructure and overseas markets.

LTEGL has also received equity support from L&T through rights issues, including funding associated with the Kandla green ammonia project.

Take-or-pay agreement provides offtake commitment

In April, LTEGL entered into a long-term take-or-pay agreement covering the supply of 300,000 tonnes of green ammonia annually from the planned Kandla facility.

Under a take-or-pay contract, the buyer is obligated to pay for the contracted volume irrespective of whether the entire quantity is ultimately taken for delivery. Such arrangements can provide projects with greater revenue visibility and support financing and investment decisions.

The agreement links the planned Kandla production capacity to Itochu’s downstream activities. Green ammonia from the facility is expected to support Itochu’s bunkering operations in Singapore and other locations, creating a potential supply route for marine fuel applications.

Itochu investment could expand international market access

The potential minority investment would bring an offtake partner into the ownership structure of the project, alongside the existing commercial arrangement.

For capital-intensive green hydrogen and ammonia developments, strategic equity participation can help diversify funding sources and strengthen project financing structures. The economics of such projects remain dependent on factors including renewable electricity costs, electrolyser performance, infrastructure requirements and long-term offtake commitments.

Itochu’s involvement could also provide LTEGL with access to international markets and prospective customers as demand for low-carbon fuels develops.

L&T may seek external capital for other projects

The discussions with Itochu come as LTEGL builds out a broader pipeline of green ammonia projects.

Industry sources said the company could also evaluate minority stake sales in other green ammonia projects to international partners as it seeks external capital to support its wider development plans.

The Kandla project, however, remains a key component of LTEGL’s export-oriented green ammonia strategy, with its planned production capacity aligned with the existing annual offtake commitment.