Fortum to Sell 500 MW of Solar Projects in India to Actis

Fortum has signed an agreement to sell the 250 MW Pavagada II and the 250 MW Rajasthan solar projects in India to Actis, a global infrastructure investment firm.

The total consideration from the divestment on a debt and cash-free basis, including the effect of the deconsolidation of the net debt, is expected to be approximately €280 million (~$333 million), most of which will be recorded during 2021.

The divestment is expected to positively impact around €20 million (~$23.78 million) on the City Solutions segment’s results. The City Solutions segment at Fortum comprises heating and cooling, waste-to-energy, biomass, and other circular economy solutions.

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 parties 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 caliber and competence,” added Mikael Karlsson, Partner and Head of Energy Infrastructure at Actis.

In 2018, Karnataka Renewable Energy Development Ltd, the nodal agency for implementing renewable policies in Karnataka, had awarded the 250 MW solar project to Fortum in Pavagada solar park, located in the state’s Tumkur district. Fortum had quoted a winning tariff of ₹2.85 (~$0.042)/kWh.

Similarly, in 2019, Fortum quoted the lowest tariff of ₹2.48 (~$0.0349)/kWh in the auction held by Solar Energy Corporation of India (SECI) for 750 MW of solar projects slated to be developed in Rajasthan. The SECI had awarded Fortum 250 MW.

According to Mercom’s India Solar Project Tracker, Fortum has around 685 MW of solar projects in operation since March 2021 and none in the pipeline. 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.

As early as 2017, Fortum had appointed Barclays to serve as its banking partner and facilitate the sale of a stake in its operational Indian solar assets. In 2018, Fortum signed an agreement to sell a 54% stake in its India solar projects to UK Climate Investments (40%) and Elite Alfred Berg (14%). Elite Alfred Berg had the option to buy up to an additional 16% from Fortum. The total capacity of the portfolio was 185 MW.