Finnish Fortum Sells Baltic District Heating

Finnish utility Fortum has agreed to sell its district heating business in the Baltics to Partners Group for €800 ($953)mn on a debt- and cash-free basis, it said March 12. The transaction is subject to customary closing conditions and is expected to be completed in the second quarter, contributing a capital gain of about €240mn. 

Last year, Fortum's sales in the Baltics were 1.4 TWh of heat and 0.6 TWh of power with pre-tax profits (Ebitda) of €54mn. Fortum is the majority owner of German utility Uniper, which has cost the state-owned utility some €7bn. It has yet to announce its decision on buying the remaining shares.

Fortum embarked on a strategic review of its district heating businesses in Estonia a few years ago and in February 2020, it said it would review the district heating businesses in the other Baltic countries. That year it sold the district heating businesses in Joensuu and Jarvenpaa, in Finland. The strategic reviews of the heating and cooling businesses in Poland, its 50% stake in Stockholm Exergi, and the Consumer Solutions business are ongoing, it said.

Partners Group said the purchase reflected its "commitment to transformational investing in assets that have meaningful impact on the communities in which they operate. The assets deliver heating to thousands of homes and businesses across the Baltic region, an area known for the severity of its winters."