Fortum agrees Finnish district heating sale

20 December 2019 - 12:00 am UTC

Finnish energy company Fortum has agreed to sell a district heating business in Finland to local utility Savon Voima Oyj.

The utility will pay EUR 530m on a debt and cash free basis for the district heating network, based in the Finnish city of Joensuu.

The network generated 550 GWh of heart and 240 GWh of power in 2018.

Savon Voima is the eighth largest district heating supplier in Finland, producing around 1.2 TW of energy across 100 stations.

Arto Sutinen, managing director of the group, said today (20 December) that he was “delighted” that the Joensuu network would be in eastern Finnish ownership, adding that shareholdings in such companies has “largely shifted” to foreign investors.

“We value the solid fundamentals of the asset and see potential in further developing it along with the existing team, including continuing the peat-to-bio conversion of the Joensuu district heating business according to the plans laid out by Fortum,” he said.

Fortum’s Joensuu business saw interest from several infrastructure fund managers including France’s AXA Investment Managers and the UK’s Equitix.

JP Morgan’s Swedish district heating platform Varmevarden and Credit Suisse Energy Infrastructure Partners were also tipped to be bidding for the business.

Fortum announced in June that it was exploring options for the Joensuu heat network, one of several it owns and operates in Finland.

The business had an EBITDA of EUR 20m in 2018.

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