Fortum, Actis inks solar investment agreement, to divest 500 MW in India
Fortum has announced that it has signed an agreement to divest the 250-MW Pavagada II and the 250-MW Rajasthan solar power plants in India to Actis. The total consideration from the divestment on a debt and cash-free basis, including the effect of the deconsolidation of the net debt, is estimated to be around EUR 280 million, most of which will be recorded during 2021. The divestment is projected to have a positive impact of approximately EUR 20 million on the City Solutions segment's results. 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 an all-inclusive agreement targeting further investments in solar power plants in India.
"I am very happy to announce the transaction with Actis, a large and reputable global investor with a strong presence in the energy sector. 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," says 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," says Mikael Karlsson, Partner and Head of Energy Infrastructure at Actis.