Reliance Industries Ltd's technology partnership with Norway's Nel ASA will help accelerate its new energy investments, including in the production of green hydrogen that will aid billionaire Mukesh Ambani's pivot towards green energy.

Reliance (RIL) on May 21 entered into a technology licensing agreement that provides the company with an exclusive license for Nel's alkaline electrolysers in India and also allows it to manufacture the Norwegian company's alkaline electrolysers for captive purposes globally.

"We see this as a win-win for RIL and Nel as it supports RIL's ambition to accelerate its new energy ambitions, build an integrated energy vertical (new energy powering existing energy investments) and decarbonise the portfolio," brokerage Morgan Stanley said in a note.

For Nel, it provides a revenue stream that it could not access on a standalone basis in India and may provide a new revenue stream that will not solely depend on the company's ability to execute on securing new large electrolyser orders. Nel ASA has about 10-15 per cent global market share in electrolysers with 350MW and 400MW deliveries in 2023-2024.

According to the agreement, Nel can procure equipment from Reliance for its own projects. Nel will continue to serve the Indian market with technology platforms that are not covered by the agreement. "Execution on new energy plans is key to the next leg of value creation this decade for RIL," it added.

The agreement with Nel Hydrogen Electrolyser AS, a fully-owned subsidiary of Oslo-based Nel ASA, "provides RIL with an exclusive license for Nel's alkaline electrolysers in India and also allows RIL to manufacture Nel's alkaline electrolysers for captive purposes globally," the Norwegian firm had said in a statement on May 21.

Ambani, Asia's richest man who built his fortune on fossil fuels, in 2022 announced plans to invest USD 75 billion in renewables infrastructure, including generation plants, solar panels and electrolyzers. Green hydrogen -- made by splitting water using clean electricity in an electrolyser -- is seen as crucial in emissions reduction goals.

Reliance is building a green energy business to supply the equipment India will need for its green energy revolution. Reliance has committed to being a net zero carbon emission company by 2035, which is earlier than the target of any other energy company in the region.

Oil-to-telecom conglomerate Reliance, which aims to turn net zero by 2035, plans to produce 100 gigawatts of renewable energy, a fifth of the nation's target for non-fossil capacity by the end of the decade.

The Indian government has set a target of 500GW of installed renewable energy by 2030. Of this, solar is expected to account for the largest share with 280GW. Through the agreement, RIL gets access to Nel's leading, proven technology platform for manufacturing electrolysers.