Larsen & Toubro’s proposed Kandla green ammonia project is moving beyond a conventional industrial investment. The company is discussing a minority equity stake in its clean-energy arm with Japan’s Itochu Corporation, while also working with the trading company on an offtake arrangement for the planned 300,000-tonne-a-year facility at Deendayal Port in Gujarat. Together, these discussions reveal how large green-energy projects are being assembled around three linked requirements: development capability, long-term buyers and external capital.
The project is being developed by L&T Energy Green Tech Ltd (LTEGL), a wholly owned clean-energy unit of L&T. According to L&T deputy managing director and president Subramanian Sarma, the company is in discussions with Itochu for equity participation in addition to the green-ammonia offtake partnership. The size of the proposed stake has not been disclosed.
That distinction matters. The proposal is not only about selling a product once the facility begins operating. It involves bringing a strategic partner into the company’s clean-energy platform while securing a commercial relationship for the ammonia that the Kandla project is expected to produce. The structure could allow the project to connect its capital needs with a defined market, although the final investment arrangement remains undecided in the information supplied.
The Kandla project is being built on land acquired by L&T last year for green-hydrogen and green-ammonia developments. LTEGL had earlier raised equity from its parent through rights issues, including an issue specifically intended for the green-ammonia project at Deendayal Port, formerly known as Kandla Port. L&T’s FY26 annual report identified the 300-kilotonnes-per-annum facility as a key part of its energy-transition strategy.
The location gives the project an infrastructure role that extends beyond production. L&T is positioning Kandla as a strategic export hub for green-hydrogen derivatives. The company’s proposed arrangement with Itochu is intended to support supplies for bunkering operations in Singapore and other locations, enabling the use of green ammonia as a marine fuel. The project therefore sits at the intersection of port logistics, industrial land, international trade and the shipping sector’s stated transition towards lower-carbon operations.
A long-term take-or-pay agreement signed in April provides another important element. Under that agreement, LTEGL is to supply 300,000 tonnes per annum of green ammonia from the proposed facility. The supplied material does not establish when production will begin, what the final project cost will be, or whether all construction and financing milestones have been completed. It does, however, show that the proposed facility has been linked to an identified offtake structure rather than being presented only as an early-stage production ambition.
## The bankability question
Large green-hydrogen and green-ammonia projects require more than land and production technology. They also need a credible route to market and a financing structure that can support development over time. The L&T-Itochu discussions illustrate this project-finance logic without establishing that the transaction has been concluded.
Itochu’s potential role could combine two functions. It may participate as an equity investor in LTEGL, while also supporting the commercialisation of green ammonia through an offtake relationship. The company’s involvement in bunkering operations in Singapore and elsewhere gives the proposed supply arrangement an international logistics dimension, according to the report. The exact contractual terms, however, have not been disclosed.
L&T is also considering whether to offer minority stakes in its green-ammonia projects to other international partners, industry sources told Economic Times. This suggests that external capital is being considered as part of a broader financing strategy rather than only for the Kandla facility. The company’s clean-energy platform is described as spanning green hydrogen and green ammonia, and the proposed partner model could help it distribute the financial burden of planned projects.
The evidence available does not show whether other partners have been identified, whether any additional stake sales are under negotiation, or how much capital LTEGL ultimately intends to raise. Those unknowns are significant because the difference between a project announcement, a financial close and commercial production is substantial. For now, the confirmed development is that discussions with Itochu are under way and that the Kandla project has a planned capacity and a proposed offtake arrangement.
## Why the port location is central
Kandla’s importance in this plan is not incidental. L&T is treating the port location as part of the project’s commercial design. Green ammonia can be produced for industrial use, but the proposed partnership places particular emphasis on exports and marine bunkering. That makes proximity to port infrastructure central to the project’s intended operating model.
The arrangement also indicates that the project is being planned around a cross-border supply chain. Production in Gujarat would be connected to demand and bunkering operations in Singapore and other locations. The supplied report does not provide details on the shipping route, storage infrastructure, conversion facilities or port-handling systems that would be required. It does establish, however, that L&T’s stated ambition is to use Kandla as an export hub for green-hydrogen derivatives rather than only as a domestic production site.
This export orientation places additional importance on coordination between the project developer, the port, shipping-related users and the international buyer. Land acquisition and plant construction are only part of the development task. The commercial viability of the proposed hub will also depend on how production is connected to storage, handling and offtake arrangements. The source material does not yet establish how those systems will be configured.
## From corporate strategy to urban infrastructure
Although the project is being developed by a corporate clean-energy arm, its consequences will be shaped by public and industrial infrastructure. A facility of 300,000 tonnes per annum requires a defined relationship with port land, transport access, utilities and safety systems. The supplied report does not disclose the project’s water demand, power source, construction schedule, employment impact or detailed environmental approvals, so those aspects cannot yet be assessed.
What is clear is that the project reflects a shift in the way industrial infrastructure is being planned. The facility is not being described as a stand-alone plant. It is part of L&T’s wider clean-energy platform, supported by parent-company equity, a proposed international strategic investor and a long-term buyer. The institutional question is therefore how responsibilities and risks will be distributed between the developer, capital partners, offtakers and the port ecosystem.
The project also demonstrates why offtake agreements have become central to green-energy development. A production facility can be technically feasible but difficult to finance if buyers are uncertain. By linking the proposed Kandla plant to a take-or-pay agreement and Itochu’s bunkering operations, L&T is attempting to connect production with demand. The available information does not show whether the agreement is conditional on further approvals or financing, but it provides a commercial anchor for the project.
## What remains to be established
Several important details remain open. L&T has not disclosed the size of the minority stake Itochu may acquire in LTEGL. The project’s total investment, financing closure, construction timeline and commissioning date are also not provided. Nor does the report establish the final structure of Itochu’s offtake arrangement or whether additional international investors will participate.
These gaps do not erase the importance of the announcement, but they define its present status. The Kandla green ammonia project has a stated capacity of 300,000 tonnes per annum, a proposed export role and a reported long-term supply agreement. It also has a parent-funded development history and a potential strategic equity partner. The project’s movement from corporate strategy to operating infrastructure will depend on the next set of documented milestones.
For India’s clean-energy infrastructure, the Kandla development is a useful case of how industrial projects are being assembled around ports, international buyers and strategic capital. Its progress will need to be tracked through the disclosure of Itochu’s proposed stake, financing and construction milestones, and further details on how green ammonia produced at Deendayal Port will reach bunkering operations in Singapore and other locations.