Fortum to sell stake in Norwegian district heating business for EUR 1bn

Image by Fortum. All Rights Reserved.

March 22 (SeeNews) - Finnish energy company Fortum Oyj (HEL:FORTUM) has sealed a deal to offload its 50% interest in Norway-based district heating company Fortum Oslo Varme AS to a consortium of investors for about NOK 10 billion (USD 1.14bn/EUR 1.03bn) on a cash and debt-free basis.

The consortium consists of Norwegian renewable energy provider Hafslund Eco, Swedish infrastructure investor Infranode and energy investment company HitecVision, Fortum said on Tuesday.

The divestiture is expected to result in a tax-exempt capital gain of about EUR 600 million (USD 662.2m) for Fortum. The transaction is subject to approval by the Oslo City Council and regulators with closing expected during the second quarter of 2022.

Half owned by the city of Oslo, Fortum Oslo Varme generated 0.1 TWh of electricity and supplied 1.8 TWh of district heating in Norway last year, which accounted for 36% of the country's district heating generation in 2021. The business operates Norway's largest waste-to-energy plant at Klemetsrud, Oslo with a capacity to end-treat 315,000 tonnes of waste per year.

Fortum took over the district heating business and the waste-to-energy plant in 2017 as part of a broader deal with the city of Oslo for the restructuring of Norwegian power company Hafslund.

The sale is the latest of a series of divestitures Fortum has made over the past years in the areas of heating and cooling. These include the sale of the district heating businesses in Joensuu and Jarvenpaa in Finland as well as the disposal of the district heating operations in the Baltics and Fortum's 50% ownership in Stockholm Exergi in Sweden.

(NOK 1 = USD 0.114/EUR 0.104)

(EUR 1 = USD 1.104)

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