Finland’s Fortum hires Barclays to sell stake in Indian solar assets

Finland’s state-controlled power utility Fortum OYJ has hired Barclays Bank to sell a stake in its operational solar power projects in India, said two people aware of the development.

The move by one of the largest nuclear and hydropower generators in Europe and Russia to seek financial investors is representative of growing consolidation in India’s clean energy space. It comes at a time when financing at the lowest cost has become key to success given the record low solar and wind power tariffs. Fortum has plans of investing around €400 million in India’s solar sector.

“Fortum is looking at growth capital and hence this mandate to Barclays,” said a person aware of the development requesting anonymity.

The quest for long-term capital by the third-largest Nordic utility comes after India witnessed record low solar tariffs of Rs2.44 per unit (kWh) in May which firmed up to Rs2.65per kWh in an auction conducted by the Gujarat government in September. These tariffs are lower than the average rate of power generated by coal-fuelled projects of India’s largest power generation utility, NTPC Ltd, at Rs3.20 per unit.

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