Finland’s Fortum has signed an agreement to sell a 54% share in its solar power company that operates four projects in India, with an aggregate capacity of 185MW, to UK Climate Investments (UKCI) (40%) and Elite Alfred Berg (EAB) (14%).
Elite Alfred Berg has the option to buy up to an additional 16% from Fortum. Through the partnership, Fortum will retain a significant minority ownership in the solar company and continue to provide operation and maintenance (O&M) services.
The transaction is subject to regulatory approvals in the EU and is expected to close in the beginning of the third quarter 2018.
Kari Kautinen, SVP, M&A and Solar & Wind Development at Fortum, said: “Our ambition is to continue the partnership also for future solar power projects. The arrangement frees up capital for further investments and enables Fortum to continue to utilise its key competencies to develop, construct and operate solar power plants in India.”
“This project demonstrates the growing maturity of India’s secondary market for renewables – creating an environment in which private investors have confidence to invest in new greenfield projects that will accelerate the decarbonisation of India’s economy,” said Richard Abel, managing director of UK Climate Investments.
UKCI is a £200 million pilot investment programme mandated to invest in green projects in India and across sub-Saharan Africa ,while EAB is an investment service company.
Last year, the head of consultancy firm Bridge to India, said that many developers with solar assets in India are looking to sell their portfolios. Some of them have been in the market for a long time and are under pressure from their investors to find an exit. Meanwhile, PV Tech recently analysed how hardening interest rates might impact the secondary market in India's solar sector.