Fortum to sell off 500 MW of India solar assets to Actis

From pv magazine India

Fortum has signed an agreement to divest a cumulative 500 MW of solar power plants in India to UK-based emerging market investor Actis. 

Actis will acquire the 250 MW Pavagada II solar plant in Karnataka and another 250 MW in Rajasthan for approximately €280 million on a debt-free and cash-free basis. Most of this value will be recorded during 2021. 

The divestment will be completed and the capital gain recorded in three tranches; during the second half of 2021 and the first half of 2022.

The divestment is expected to have a positive impact of approximately €20 million on the results of Fortum’s City Solutions segment.

Fortum and Actis have also signed a comprehensive agreement targeting further investments in solar power plants in India.

“We can utilize the strong competencies Fortum has gained over the years in solar development and construction, while utilizing the financial strength and track record of Actis to realize the investment potential,” said Per Langer, executive vice president of Fortum’s City Solutions division.

“This is an important step for Actis as we further strengthen our presence in India building on our achievements to date. We are pleased to be entering into this transaction with a firm of Fortum’s calibre and competence,” said Mikael Karlsson, partner and head of Energy Infrastructure at Actis.

Since 2013, Fortum has developed and constructed 680 MW of solar power in India. Over time, most of this capacity has been divested to enable further investments with limited equity exposure, in line with the build-operate-transfer business model.