Fortum and Elite Alfred Berg (EAB) have entered into a partnership with UK Climate Investments (UKCI) that will introduce a new asset class into the Indian renewables market.
Announced today, UKCI will acquire a 40 per cent ownership interest in a 185 MW portfolio of operating solar assets in India. Fortum will retain a 46 per cent interest in the solar farms, with EAB entering an agreement to acquire the remaining 14 per cent.
The transaction represents a significant development in one of the world’s fastest growing solar markets, with the portfolio used to create India’s first unlisted renewables ‘yieldco’ vehicle for international investors.
This market-first initiative will establish a new asset class that seeks to generate regular, predictable cash yield for investors. In doing so, the project will support the further development of India’s secondary market in renewable assets and the recycling of development capital to underpin accelerated deployment of new renewable energy infrastructure.
UKCI is a joint venture between the Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy, which aims to help the world’s developing economies adapt to climate change and promote cleaner, greener growth.
The acquired portfolio comprises four solar farms located in Rajasthan, Madhya Pradesh, and Karnataka. The plants generate enough clean electricity to power ~315,000 homes, avoiding ~330ktpa of CO2 emissions annually.
As part of the agreement, Fortum will continue to provide operation and maintenance services for the assets.
It is expected that the transaction will reach financial close in the third quarter of 2018.
Richard Abel, UKCI Managing Director, said:
UKCI is delighted to provide the necessary long-term capital to cornerstone this innovative investment vehicle, helping the continued development of India’s fast-growing renewables sector.
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Notes to editors
About UK Climate Investments
UKCI is a £200 million pilot investment programme mandated to invest in India and across sub-Saharan Africa. It is targeting transformational green projects where UKCI capital can mobilise additional private sector investment on a sustainable basis to help the world’s developing economies adapt to climate change and promote cleaner, greener growth. UK Climate Investments LLP (UKCI) is a joint venture between the Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy. greeninvestmentgroup.com
About Macquarie Group
Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Founded in 1969, Macquarie employs more than 14,400 people in over 25 countries. At 31 March 2018, Macquarie had assets under management of £272 billion. www.macquarie.com
Fortum is a leading clean-energy company that provides its customers with electricity, heating and cooling as well as smart solutions to improve resource efficiency. We want to engage our customers and society to join the change for a cleaner world. We employ some 9,000 professionals in the Nordic and Baltic countries, Russia, Poland and India. In 2017, our sales were EUR 4.5 billion and 61% of our electricity generation was CO2 free. Fortum's share is listed on Nasdaq Helsinki. www.fortum.com
About Elite Alfred Berg
EAB Group Plc is a profitable and growing investment service company offering versatile and high-quality asset management services for both consumer clients and professional investors. EAB Group Plc is listed on the First North Finland market maintained by NASDAQ Helsinki Oy (Helsinki Stock Exchanges). EAB Group Plc is the parent company of EAB Group. The Groups’ customer base consists of individuals and corporations that are served nationwide in 17 different offices. The Group employs more than 100 investment professionals, and over 25 tied agents provide its services. On behalf of its clients, the Group manages assets of approximately EUR 3 billion in total. Check out EAB Group’s services at www.eabgroup.fi