Fortum to sell Järvenpää-Tuusula district heating business for €375m

Fortum has agreed to divest its district heating business in the Järvenpää-Tuusula region in Finland to a consortium made up of Vantaa Energy, Infranode, and Keva for about EUR 375 million.

The deal marks a continuation of Fortum’s execution of its strategy, under which the Finnish energy company keeps on reviewing its businesses to streamline its portfolio for value creation.

In June 2019, the state-owned electric services company said that it was mulling the strategic options for its district heating businesses in Estonia and in Joensuu, Finland. Following this, Fortum sold its Joensuu district heating business in January 2020 for approximately EUR 530 million to Savon Voima Oyj.

In February 2020, Fortum said that it will review and consider strategic options for the district heating businesses in Järvenpää, Poland, and the Baltics. Last month, the Finnish energy company agreed to take full ownership of the Tartu district heating business so that it can increase the flexibility in potential future options for the Estonian district heating businesses.

Fortum to sell Järvenpää-Tuusula district heating business for €375m. Photo courtesy of Fortum.

The electric utility said that the strategic review for the district heating businesses in Poland and the Baltics is still going on and proceeding as per the plan.

Per Langer – Executive Vice President of Fortum City Solutions said: “The divestment of our district heating business in the Järvenpää-Tuusula area follows the successful divestment of the Joensuu district heating business in line with our portfolio optimisation. We are pleased that the buyer is a consortium with strong local presence with high ambitions to further develop the business in this area.

“In our heating business in Finland, we will continue our efforts on the decarbonisation project targeting discontinuation of the use of coal in 2025 in the district heating network in the City of Espoo.”

Subject to the meeting of customary closing conditions, the deal is anticipated to be completed in Q3 2020.

Jukka Toivonen – CEO of Vantaa Energy said: “We’re pleased that Fortum chose our consortium as the new owner of the district heating business in Järvenpää-Tuusula area. Vantaa Energy has a strong expertise in producing district heating services in a sustainable way. The share of renewable and carbon neutral energy forms in production has been increased consistently, and the company will continue in the same direction.

“Keva and Infranode both have strong experience in implementing similar investments and expertise in the field of energy infrastructure in the Nordics.”