Fortum Looking To Sell Equity Stake In India’s Solar Assets

One of the leading foreign solar power developers active in India – Fortum – is planning to sell equity stake in its solar power projects, media outlets have reported.

Indian business daily Mint has reported that the Finnish company is planning to raise funds through the sale of equity in several of its solar power projects. Fortum has 215 megawatts of operational solar power capacity with several large projects under construction.

The company’s alleged decision to offload equity in its projects makes sense as the tariffs in India have fallen very sharply over the last few months. Fortum had secured a 70 megawatt project in the state of Rajasthan in January 2016. The tariff of Rs 4.34/kWh (6.7¢/kWh) quoted by the company was the lowest in India at the that time and only 8% higher than the global record low bid at that time.

It also owns a 100 megawatt project in the state of Karnataka which it won in a competitive auction at Rs 4.79/kWh (7.4¢/kWh). The company continues to participate in competitive auctions in India.

Last year, Fortum had announced plans to invest up to €400 million in India’s solar power market. The company, however, is now looking to diversify into electric vehicles as well. Earlier this month, Fortum signed an agreement with an Indian company to set up charging stations for electric vehicles. The two companies plan to set up 150 charging stations across India over the next 12-18 months.

The sharp decline in tariffs has resulted in a wave of consolidation in the India solar power market. Welspun Energy, SunEdison India, Suzlon Energy, and Green Infra are (or were) some of the major developers that sold off their assets, partially or fully, in the last few months.