France-based oil company Total has entered an agreement to purchase an indirect interest of 23% in EREN Renewable Energy (EREN RE) for €237.5m.

The new deal also offers Total an option to acquire EREN RE after a period of five years.

Total seeks to increase its growth in the production of power from renewable sources and to enter the windpower industry.

Subject to approval by relevant competition authorities, the deal will see EREN RE renamed Total Eren. The new entity will focus on developing solarfarm business in emerging countries where the demand for electricity is increasing.

The proposed deal also complements Total’s portfolio of renewable energy businesses and is expected to help Total achieve its goal of installing 5GW of capacity in five years.

"[New entity Total Eren] will focus on developing solarfarm business in emerging countries where the demand for electricity is increasing."

Total chairman and CEO Patrick Pouyanné said: “Total integrates climate challenge into its strategy and is pursuing steady growth in low-carbon businesses, in particular in renewable energy.

“By partnering with EREN RE, we are leveraging a team that has a proven track record in renewable power production, and we are investing in an additional asset to accelerate our profitable growth in this segment, in line with our ambition to become the responsible energy major.”

Established in 2012, EREN RE currently serves various power generation markets including wind, solar, and hydro.

The company’s global portfolio of installed capacity represents 650MW of assets that are either in operation or under construction.