Finnish utility Fortum has secured a deal to divest two solar projects in India totalling 500MW of capacity to private equity firm Actis.
The transaction includes the 250MW Pavagada II project in Karnataka that Fortum won the rights to in 2018 and that completed last year. The park has a fixed tariff of INR2.85/kWh for its output to the grid for 25 years. The second project is the 250MW Rajasthan facility that the utility secured the rights to in 2019 and has a fixed tariff of INR2.48/kWh for 25 years.
Total consideration from the divestment on a debt- and cash-free basis is expected to be approximately €280 million (US$333 million).
Fortum, which has developed and constructed 680MW of solar in India since 2013, also revealed that it has signed an agreement with Actis that will see the partners target further investments in the country’s PV sector.
For Actis, the deal comes less than a year after the emerging market investor completed the acquisition of two projects in India totalling 400MW from independent power producer Acme.
India installed 2,105MW of solar in the first quarter of 2021, taking the country’s total cumulative capacity to 44.2GW, according to consultancy Bridge to India, which said deployment in future quarters could be impacted by lockdown measures and rising project execution costs.