Finnish energy company Fortum said on Tuesday it plans to invest €200-400 million ($228-456 million) in solar projects in India, joining firms from Canada to Japan looking to tap into the South Asian nation’s growing renewable energy sector.
Fortum has also decided to bid for an additional 100 megawatt of solar projects in India, the company said in a statement. It already has 15 megawatt of solar capacity in India and won a reverse auction for a 70 MW project in January this year.
India is the first overseas solar energy market for Fortum, the company said, adding that projects in the country will be selected from various central, state and public-sector undertaking schemes.
Overall, it is targeting a gigawatt-scale wind and solar portfolio worldwide. The company has total power generation capacity of about 13,700 megawatt, according to its website. This mostly includes hydropower, nuclear energy and combined heat and power plants that use a variety of fuels such as biomass, waste and fossil fuels.
“India… offers one of the best solar resources and a sound government support for the development of the solar sector,” Fortum said.
Fortum has become the latest foreign firm to enter India’s clean-energy market after the Narendra Modi government scaled up the renewable energy capacity target to 100 gigawatt of solar capacity and 60 gigawatt of wind power by the end of 2022. In March, Canadian institutional fund manager Caisse de dépôt et placement du Québec (CDPQ) said it had decided to invest $150 million (over Rs 1,000 crore) in India’s renewable energy sector by 2020.
In June last year, Japanese internet and telecom conglomerate SoftBank Corp joined hands with Taiwanese contract electronics manufacturer Foxconn Technology Group and India’s Bharti Enterprises Ltd to form a joint venture for renewable energy in the country. The new venture, christened SB Energy, envisages an investment of around $20 billion over a period of time. SB Energy won its first project in December.
Emerging markets-focused private equity firm Actis last year committed an investment of $230 million (Rs 1,400 crore) to create an India renewable energy platform christened Ostro Energy. In February this year, the World Bank group’s International Finance Corporation decided to facilitate debt funding of about $177 million to Ostro.
One of the biggest firms in India’s solar energy sector is SunEdison Inc. The US firm expanded rapidly in India and drove down solar energy tariffs to record lows, but it is now struggling to survive after piling up massive debt. In November, it decided to sell 425 megawatt of solar projects in India to its TerraForm Global Inc unit for $231 million (about Rs 1,530 crore).