Finnish utility firm Fortum on Tuesday said it will invest 200-400 million euros (around Rs 1,500-3,000 crore) in solar power projects in India.
"India offers one of the best solar resources and a sound government support for the development of solar sector. The country provides a good platform for Fortum to further develop its business in solar also elsewhere," the company said in a statement.
The government plans to jack up solar power generation capacity to 100 gigawatts (Gw) by 2022, up from 5.25 Gw currently. India gets more than 300 days of sunshine a year across the seventh-largest land area in the world.
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Fortum has 15 megawatts (Mw) of solar capacity in India. In January this year, it won a reverse auction for a 70 Mw project with a fixed tariff for 25 years.
In addition, Fortum today "decided to bid for additional 100 Mw in India, with a fixed tariff for 25 years," the statement said. "Some large-scale greenfield development will be targeted to enable economies of scale," the statement added.
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The company will also consider seeking "possible partnerships or other forms of cooperation, which would on long-term create a more asset-light structure".
"Fortum seeks to allocate, of its planned growth capital, in the range of 200-400 million euros in solar projects in India," the statement said.
Companies win solar projects if they offer to supply electricity at the lowest tariff in competitive auctions. The last auction in January saw rates reach a historic low of Rs 4.34 per kilowatt-hour (or unit).
Besides Fortum, other foreign firms investing in solar power projects in India include SunEdison Inc of US, Canada's SkyPower Ltd, Japan's SoftBank Group Corp and a local unit of France's Solairedirect SA.
Projects in India are to be selected from various central, state and public sectors undertaking schemes, which would guarantee a long-term power purchase agreement, taking into account Fortum Group's financial targets.
The company said its solar strategy targets a wider geographic scope than its current business portfolio.
"With technologies rapidly maturing, utility competences are becoming increasingly important in solar business, and expansion in solar fits very well Fortum's vision to be the forerunner in clean energy. Overall, Fortum is targeting a Gw-scale wind and solar portfolio," the statement added.