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    Finland sells Swedish heating company


Fortum has been reviewing its shareholdings in district heating.

by: William Powell

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Finland sells Swedish heating company

Finnish state utility Fortum on June 30 sold its 50% stake in Swedish district heating and cooling company Stockholm Exergi Holding, ending "two decades of co-operation" with the capital, it said.

It realised 29.5bn Swedish krona ($3.45bn) from the sale and Fortum expects to record a tax-exempt capital gain of about €2.4bn ($2.85bn).

The buyer was a group of long-term European institutional investors with a commitment to the infrastructure sector: APG, Alecta, PGGM, Keva and AXA. The other owner is the city of Stockholm.

In 2020, Stockholm Exergi’s heating and cooling sales were 7.6 TWh and power sales 0.7 TWh. Pre-tax earnings were 2.8bn Swedish krona. Fortum recorded €46mn (466mn krona) in "share of profits from associates and joint ventures" from Stockholm Exergi.

Fortum, which over the past few years has built up a majority stake in German utility Uniper at a cost of some €6.5bn, said a year ago it would begin the strategic evaluation of its 50% ownership in Stockholm Exergi. It has already sold the district heating businesses in Joensuu and Jarvenpaa, in Finland, and those in the Baltics in March. The strategic reviews of the heating and cooling businesses in Poland and the Consumer Solutions business are currently ongoing.

CEO Markus Rauramo said Fortum was very pleased to have found a new owner and the transition to low-carbon intensity has largely been done. 

The transaction is subject to customary closing conditions. Fortum expects closing to take place before the end of 2021.