Hexa Climate’s Strategic Gambit: Acquiring Fortum’s Indian Renewables Assets to Fuel $500M Growth Spree

Hexa Climate Solutions, backed by I Squared Capital, has made a bold move in the renewable energy sector by acquiring Finland’s Fortum’s entire renewables portfolio in India. The deal, finalized in 2024, marks Hexa’s aggressive entry into one of the world’s fastest-growing green energy markets while signaling Fortum’s strategic retreat from non-Nordic markets amid significant financial headwinds. With plans to invest $500 million in renewables, water, and carbon offset projects, Hexa aims to capitalize on India’s ambition to reach 500 GW of non-fossil power by 2030—a target that could redefine the global energy landscape.

The Acquisition: A Strategic Land Grab

Hexa’s acquisition of Fortum’s Indian renewables unit—Fortum India Pvt. Ltd. (FIPL)—includes 206 MW of operational solar and wind hybrid projects and a 600 MW pipeline of shovel-ready projects. The deal also secures the entire 40-member Indian team, ensuring continuity in operations and expertise. While the precise value of the transaction remains undisclosed, its strategic value is undeniable. Fortum, which entered India in 2012, exited due to severe losses from its German subsidiary Uniper and Russian asset seizures, prompting a pivot to its Nordic core.

The competitive bidding process, managed by EY, attracted major players like Japan’s Marubeni and Dutch pension fund APG, underscoring the allure of India’s renewables sector. Hexa’s victory, overbidding to secure 100% ownership, highlights its confidence in the market’s potential.

The $500 Million Investment: A Triple-Threat Strategy

Hexa’s post-acquisition roadmap is threefold:
1. Renewables Expansion: The $500 million will turbocharge development of its 2.5 GW global pipeline, including 300 MW of advanced projects in India and a 1 GW solar plant in Malaysia.
2. Water Management: Investments will target water purification and recycling infrastructure, aligning with India’s water stress challenges.
3. Carbon Offsets: Hexa plans to monetize carbon credits from its projects, a growing revenue stream under global net-zero mandates.

This data query reveals Fortum’s declining stock value post-2022, reflecting losses from Uniper and Russian assets—factors that drove its exit from India.

India’s Renewable Revolution: Tailwinds for Hexa

India’s push for 500 GW of non-fossil energy by 2030 (up from 165 GW today) is a goldmine for firms like Hexa. Key advantages include:
- Regulatory Support: Time-of-Day (ToD) tariffs and open-access power procurement reduce grid dependency risks.
- Corporate Demand: C&I (commercial and industrial) buyers, including tech giants and manufacturing firms, are aggressively sourcing renewables.
- Policy Momentum: States like Maharashtra and Karnataka offer streamlined approvals for solar and wind projects.

Hexa’s focus on C&I clients positions it to capture this demand. Its hybrid solar-wind projects and battery storage solutions align with corporate buyers seeking 24/7 green energy.

Risks and Challenges

• Deal Uncertainty: The undisclosed purchase price raises questions about valuation accuracy.
• Market Competition: Established players like ReNew Power and Avaada Energy dominate Indian renewables, requiring Hexa to innovate to stand out.
• Policy Fluctuations: Delays in ToD tariff implementation or subsidy cuts could impact project economics.

Conclusion: A Worthy Gamble for Long-Term Gains

Hexa’s acquisition and investment plan are a calculated bet on India’s renewables boom. With a $500 million war chest, a 600 MW pipeline, and a retained expert team, the firm is well-positioned to scale in a market poised for exponential growth.

The numbers speak volumes: India’s renewables capacity needs to grow by 215 GW in six years to meet its 2030 target—a rate requiring annual investments of $30–40 billion. Hexa’s $500 million is a drop in the bucket, but its strategic focus on C&I clients and carbon credits could carve out a niche.

For investors, Hexa’s move is a vote of confidence in India’s green future. While risks persist, the rewards—both financial and environmental—are immense. As I Squared Capital’s $37 billion infrastructure portfolio attests, this is a play for the long game.

This data visualizes India’s trajectory from 165 GW today to 500 GW by 2030—a curve Hexa aims to ride to the top.