Fortum, Rusnano secure 1GW for wind investment fund

The pair scooped the projects for their €467m wind fund in Russia’s latest renewables auction and may look to sell them on within the next five years.

Russia’s private equity sovereign wealth fund Rusnano and Finnish utility Fortum have been awarded 1GW of wind projects in Russia for their 30 billion rubles ($520.4 million; €466.6 million) wind investment fund.

The capacity was secured following the conclusion of Russia’s renewable energy auction last week, in which just over 1.6GW was allocated despite bids totalling 2.5GW. The projects need to be commissioned between 2018 and 2022 and will be covered by Capacity Supply Agreements for 15 years at prices between €115 and €135 per MWh.

They will be financed by the wind fund that Rusnano and Fortum jointly set up at the end of April, as well as with non-recourse financing provided by Russian banks. A “number of the largest banks” have also expressed interest in joining the fund, Rusnano said. The Russian fund and Fortum said that once the wind farms secured in the auction are operational, they “may interest financial strategic partners” wanting to invest in renewables.

Rusnano said Russia “has the largest wind power potential in the world” due to its geographical and climatic features. This remains unexploited, with only 11MW installed as of the end of last year, according to the International Renewable Energy Association.

However, Russia’s Association of Wind Power Industry on Wednesday revealed it is expecting a boon in the coming years following recent tenders, with commissioning peaking in 2020 when 620MW is expected to be installed in a single year.