New Delhi
: Finnish state-owned energy company Fortum OYJ is aware of the development by selling its platform Fortum India P. Pvt Ltd (FIPL) to New York-based I Squared Capital-backed HEXA climate solutions to India’s renewable energy market, which includes its management company and carbon credit, two are aware of the development.
There are five bidders in the sale process, including Marubeni Corp in Japan, AP Moller Capital, Dutch Pension Fund APG and Infrastructure Fund Manager. Ten companies, including large Arcelormittal in steel and mining, have signed an undisclosed agreement (NDA) to be called the Samsara project.
Mint The inability to determine the value of the deal marks an important point for the third largest Nordic utility to exit from India, a market it entered in 2012.
The initial proposed deal was to dilute most of the shares of management company Fortum India Pvt Ltd and invested about $300 million to build future projects, but HEXA Climate Solutions has acquired a 100% stake, as well as a team of 40 members.
FIPL’s portfolio includes 206 Mega Watt (MW) commercial and industrial (C&I) solar hybrids, with an additional 600 MW of preparation projects.
“HEXA Climate Solutions has acquired Fortum India Pvt Ltd. to be released next week.” The first of the two quoted earlier said that both spoke on anonymity.
Fortum’s Nordic strategy drives India’s exit
According to its Nordic strategy, Fortum earlier announced restrictions on its exposure in India and assess alternatives to its remaining business, Fortum India sold a total of 1.1 Gigawatt (GW).
Sanjeev Aggarwal, founder and executive chairman of HEXA climate solutions, Sanjay Aggarwal, Fortum India president, and EY declined to comment.
A Fortum Corporation spokesperson said in an emailed reply: “As a stock-listed company, we do not publish any market rumors or speculation. When divesting ownership in the 185 MW Indian solar portfolio in May 2024, Fortum announced that in India’s Northern strategy, Fortum restricts its consistency in India and assessments and does not limit it to alternatives and replaces it with alternatives and replaces it with operations. Whether the assessment will result in any transactions, if appropriate, will inform the market.”
I plan to invest about $500 million in Hexa climate solution, which focuses on renewable energy, water and carbon offsets and has a 2.5 GW development pipeline.
“We are pleased to avoid commenting on this transaction,” a Marubeni Corp. spokesperson said in an emailed reply.
Speakers for APG, AP Moller Capital and Arcelormittal were emailed Saturday night and didn’t answer immediately until the time of publication.
Fortum’s Global Loss
Fortum’s Indian exports emerged against the backdrop of the Ukrainian war, resulting in disruptions in gas supply and substantial losses to Fortum majority stake in Uniper, which was subsequently sold to the German government for about 6 billion euros.
In addition, the Russian Federation confiscated the Russian factory of Fortum, worth about 500 million euros. These prompted Fortum to rewrite its script and transfer it to the Nordic market by cutting bets from other geographical locations, including India.
As part of Fortum OYJ’s exit strategy from the Indian market, London-based Opus Corporate Finance LLP is also running a deal called Butterfly to dilute a majority stake in Fortum’s electric vehicle charging network Glida, formerly known as Fortum Charge & Drive India, which has about 850 charging points, as mentioned earlier.
Fortum India has sold 700 MW to Actis LLP, with an additional 230 MW to UK climate investment and Elite Alfred Berg; and Malaysia’s state-run oil and gas company Petroliam Nasional Bhd or Petronas unit Gentari. This present transaction comes in the backdrop of AM Green, set up by the founders of Greenko Group, Mahesh Kolli and Anil Kumar Chalamalasetty, acquiring Fortum Oyj and Chempolis Oy’s 50% stake in their joint venture—Assam Bio Refinery Private Limited—and also the Oulu-headquartered biotechnology firm Chempolis Oy in which Fortum has a stake, as reported by Peppermint.
India’s C&I division has been attracting strong investor interest, given the regulatory landscape that supports many transactions in the space, its rules allow large power users to get energy from the open market rather than the more expensive grid. The C&I project also avoids the risk of state-owned generator companies cutting power procurement. Additionally, the state power regulatory board’s time of day (TOD) on consumer tariffs in large C&I categories help maintain investor interest.
