Taaleri eyes Fortum’s solar power projects in India

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Taaleri Plc has evinced interest in acquiring a stake in Finland’s state-controlled power utility Fortum Oyj’s operational Indian solar power projects, said two people aware of the development.

Fortum is present in electricity, heating and cooling businesses in Nordic and Baltic countries, Russia, Poland and India with €3.6 billion in annual sales. Fortum India’s operation has a solar power project portfolio 215 megawatts (MW).

Mint reported on 23 October about Fortum Oyj hiring Barclays Bank to run the sales process to attract growth capital.

Taaleri, whose operations are supervised by the Finnish Financial Supervisory Authority, has three lines of businesses—wealth management, financing, and energy. Also, Taaleri Solar Wind fund is Finland’s first equity fund to invest in overseas green energy assets.

“Taaleri is interested in Fortum’s operational Indian solar power projects,” said a person requesting anonymity.

Another person who also didn’t want to be identified confirmed the development.

Taaleri’s interest in the Indian assets of one of the largest nuclear and hydropower generators in Europe and Russia comes in the backdrop of India lining up large green energy contracts that includes plans to invite bids for setting up 20 gigawatts (GW) of solar power capacity, the world’s largest solar tender, at one go; and also awarding wind power contracts totalling 24.5GW over the next two years. The scale of these contracts has piqued investors’ interest.

Low-cost financing holds the key to success given the record low Indian solar and wind power tariffs. Interestingly, the race for aggressive tariffs to secure renewable energy project contracts in India has been led by overseas firms.

A Barclays spokesperson declined to comment. A Taaleri spokesperson in an emailed response said: “Taaleri is an active actor in the market having multiple projects in progress. We have a consistent policy not to comment on any market rumours.”

India’s green energy space is witnessing consolidation with overseas investors, such as France’s Engie and Rosatom State Atomic Energy Corp., readying their India plans. While there are many deals at the discussion stage, not many closures are happening due to differences over valuations. In response to a query about whether Taaleri is in talks to acquire stake in Fortum Oyj’s operational solar power projects in India, a Fortum OYJ spokesperson in an emailed response said, “As we have previously commented we are committed to solar power in India, and seek to allocate of our planned growth capital in the range of €200-400 million in solar projects there. We have also stated previously that we consider seeking possible partnerships or other forms of cooperation, which would on long-term create more asset-light structure. This could, for example, mean taking financial investors alongside us to our operating renewable assets.”

“However, there is so far no news regarding any such negotiations, and as a principle, we don’t comment on market rumours,” the spokesperson for the third-largest Nordic utility added.

The interest in the renewable energy space also seems to be buoyed by federal policy think-tank Niti Aayog’s projections of a 597-710 GW capacity by 2040 in its new draft energy policy. The National Democratic Alliance government has set up an ambitious clean energy target of 175GW by 2022. Of this, 100GW is to be generated by solar projects and 60GW by wind projects. India’s ambition focusing on green economy hasn’t gone unnoticed by Taaleri or its peers.

“The fact that renewable energy has become competitive when compared with conventional forms of energy production will for its part allow adherence to the commitments of the Paris agreement. That is why the production capacity of both solar and wind power is expected to grow phenomenally by the end of 2020. India, for example, has set a target to build 100 GW of new solar energy production capacity by the end of 2022,” according to information available on Taaleri’s website

 

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