Borealis and first state buy 2.55b finnish grid

Subscribe to our newsletter and get the latest news and business opportunities in your inbox
Borealis and first state buy 2.55b finnish grid

Fortum, a Finnish energy company, has agreed to sell its electricity distribution business in Finland to Suomi Power Networks Oy, a consortium led by international infrastructure investors First State Investments (40%) through First State European Diversified Infrastructure Fund and Borealis Infrastructure (40%) and completed by Finnish pension funds Keva (12.5%) and LocalTapiola Pension (7.5%).

first_state_investments-150The total consideration is €2.55 billion on a debt- and cash-free basis. Fortum expects to complete the divestment process during the first quarter of 2014 subject to the necessary regulatory approvals as well as customary closing conditions. Fortum expects to book a one-time sales gain of €1.8-1.9 billion corresponding to approximately €2.0 per share in its Electricity Distribution and Sales Division's first quarter 2014 results. A total of 320 employees will transfer with the business at closing with existing terms of employment.

Fortum's electricity distribution business has 640,000 distribution customers. The company said they will not be affected.

The decision to divest Fortum's electricity distribution business in Finland is linked to the strategic assessment of the company's electricity distribution business' future alternatives.

Fortum also prepares for a possible sale of the Swedish and Norwegian electricity distribution businesses. The decision to complete the process is dependent on market development and development of national regulation in both countries, among others.

Fortum's electricity distribution business in Finland includes two jointly managed grid companies: Fortum Espoo Distribution Oy, with grids in the city of Espoo and surrounding communities and the city of Joensuu, as well as Fortum Sähkönsiirto Oy, with several grid areas located mainly in southern and western Finland, but also in the north-western part of the country. The combined network length of the companies is 79,000 kilometres delivering approximately 12.6 terawatt- hours of electricity to customers. Fortum's market share of the local electricity distribution in Finland is approximately 20%.

List of country news

Country news

  • December 16, 2013

    OFI Infravia acquires electricity distribution network in Finland

    OFI InfraVia's European fund II (InfraVia II), its second European infrastructure fund, has acquired Outokumpu's electricity distribution network located on the Tornio site in Finland. Read more
  • January 29, 2014

    Tender for Finnish E18 PPP in March

    The Finnish government has published a Prior Information Notice (PIN) in the Official Journal of the European Union for the Design, Build, Finance, Maintain and Operate (DBFMO) of the Hamina-Vaalimaa section of the E18  highway. The notice said that the tender process is expected to begin in March 2014. Read more
  • March 20, 2014

    Tender launched for Finland's E18 road PPP

    A tender for the second section of Finland's E18 highway PPP scheme has been issued. Read more
  • April 16, 2014

    Impax NEF II acquires wind farm in Finland

    Impax announced that it has closed the project financing of the Joukhaisselkä wind park in Northern Finland with Skandinaviska Enskilda Banken AB (SEB) and has completed the acquisition of the Kuolavaara-Keulakkopää wind park from Fortum and Metsähallitus. Read more
  • May 02, 2014

    Three teams qualify for Finland's E-18 PPP

    Three teams have been qualified for the Design, Build, Finance, Maintain and Operate (DBFMO) of the Hamina-Vaalimaa section of the E18  highway in Finland. Read more

Share this news

Join us

In order to get full access to News section, you must have a full subscription. You can check all the benefits of becoming a member and purchase a subscription on our membership page.