The solar assets have piqued significant investor interest due to their quality and operational excellence, making this development a key milestone in India’s renewable energy landscape.
Actis, Edelweiss, and Petronas are currently discussing acquiring a substantial 185 megawatts (MW) portfolio of solar assets in India. These assets are presently owned by the Finnish utility company Fortum and its co-investors. According to sources familiar with the matter, the enterprise value of this potential transaction is estimated to be at least $150 million.
This development comes on the heels of Kotak Mahindra Capital’s appointment to identify potential buyers for Fortum’s solar portfolio, as initially reported on April 25. The interested parties are conducting comprehensive due diligence on the solar assets, with final bids anticipated soon. These assets have generated significant investor interest due to their quality and operational excellence.
The transaction, if completed, is expected to value the solar portfolio at an enterprise valuation exceeding $150 million. Importantly, it will represent a complete divestiture for Fortum and its co-investors, marking their exit from the portfolio. Fortum, UK Climate Investments (backed by Macquarie Group), and Finnish asset management firm Elite Alfred Berg jointly own the solar assets in question. Fortum is the largest stakeholder, holding a 46% stake, while UK Climate Investments and Elite Alfred Berg own 40% and 14% stakes, respectively. UK Climate Investments and Elite Alfred Berg had acquired their stakes from Fortum in 2018.
The solar portfolio encompasses a 100 MW solar project located at the Pavagada Solar Park in Karnataka, two additional 70 MW and 5 MW each in Rajasthan, and a 10 MW facility in Madhya Pradesh. Fortum has secured 25-year power purchase agreements with state-owned NTPC Ltd and Solar Energy Corporation of India Ltd (SECI) for these solar projects, ensuring long-term revenue stability. Fortum’s foray into the Indian solar power sector began in 2013 with the acquisition of a 5 MW power plant. Over the years, it expanded its capacity, culminating in the commissioning of the 70 MW and 100 MW projects in 2017. Notably, in June 2021, Fortum had sold 500 MW of its solar assets in Karnataka and Rajasthan to Actis for 280 million euros.
Actis, Edelweiss, and Petronas have established themselves as active participants in India’s green energy landscape. Actis Chairman Torbjorn Caesar expressed the firm’s intention to invest up to $2.5 billion in India’s energy and infrastructure sectors over the next four years, with a significant emphasis on renewables. Actis has previously developed and divested two substantial renewable energy companies in India, Ostro Energy and Sprng Energy. In a related development, Petronas, along with other bidders, expressed interest in acquiring a majority stake in Fourth Partner Energy, a TPG-backed company specializing in providing green energy to commercial and industrial establishments, as reported by ET on October 17. Additionally, in 2019, Petronas had acquired Amplus Energy, a rooftop solar power producer, for ₹2,700 crore. In 2021, Edelweiss acquired a 74% stake in an 813 MW renewable portfolio owned by French energy major Engie, further solidifying their presence in the renewable energy sector.
