Total Corporate Funding in Solar Sector Up 11 Percent with $6 Billion in 1H 2019: Mercom Report

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  • Of the top seven VC funded companies globally in the first half of 2019, three were Indian companies.
  • A total of 62 VC investors participated in solar funding in 1H 2019.

Mercom Capital Group, a global clean energy communications and consulting firm, has released its report on global funding and merger and acquisition (M&A) activity for the solar sector in the second quarter and the first half of 2019.

As per the report, total corporate funding (including venture capital funding, public market and debt financing) in the first half (1H) (Jan-Jun) of 2019 was up with $6 billion from the $5.4 billion raised in 1H 2018, an 11 percent increase year-over-year (YoY).

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Corporate funding increased in Q2 2019 with $3.3 billion in 29 deals compared to the $2.7 billion in 35 deals in Q1 2019. Year-over-year funding in Q2 2019 was about 12 percent higher compared to the $2.9 billion in Q2 2018.

“Financial activity was up in the first half of the year and there is optimism in the global markets, which was reflected by climbing solar stock prices,” said Raj Prabhu, CEO of Mercom Capital Group.

According to him, demand in Europe has picked up post MIP and the duty exemption for bifacial modules provided the much-needed boost.

Solar activity in India is expected to pick up post elections, however, China remains the wild card, he said.

VC funding

In 1H 2019, global VC funding (venture capital, private equity and corporate venture capital) in the solar sector was 50 percent higher with $799 million compared to $531 million raised in the first half of 2018.

In Q2 2019, global VC funding increased to $622 million in 16 deals compared to $370 million raised in 15 deals in Q2 2018, almost 68 percent higher YoY.

Top VC/PE deals in 1H 2019 included: $300 million raised by Renew Power, $144 million raised by Avaada Energy, $65 million secured by Yellow Door Energy, $50 million raised by Spruce Finance, $41 million raised by Oxford Photovoltaics, $39 million raise by CleanMax Solar and the $31 million raised by BBOXX.

A total of 62 VC investors participated in solar funding in 1H 2019.

Notable India Deals in Q2 2019

VC Funding:

ReNew Power – an renewable energy project developer – raised $300 million through a rights issue. Goldman Sachs, Abu Dhabi Investment Authority (ADIA) and Canada Pension Plan Investment Board (CPPIB) have subscribed to the issue with each of the shareholders infusing $100 million.

Avaada Energy – an independent power producer (IPP) – secured financing of around $143.8 million in the form of equity infusion from the Asian Development Bank (ADB), German development bank – DEG, Dutch development finance company – FMO, and promoters’ equity.

CleanMax Solar – a rooftop solar developer – raised $39 million investment from the United Kingdom Climate Investments, a joint venture between the Green Investment Group and the U.K. Government’s Department for Business, Energy and Industrial Strategy.

ZunRoof – an Indian solar rooftop startup – raised another round of Series A funding of $1.2 million from Godrej Properties.

Skilancer Solar – a startup that manufactures robotic cleaning equipment to clean solar modules – received an undisclosed seed investment from Alfa Ventures, a proprietary fund launched by angel investor Dhianu Das to make seed investments in startups.

Debt Funding:

Adani Green Energy Limited (AGEL) – the renewable energy arm of the Adani Group – raised $500 million through green bonds.

Srei Equipment Finance – received a credit approval of $30 million from FMO.

Canadian Solar Projects – a wholly-owned subsidiary of module supplier Canadian Solar – existing credit facility increased from $36 million to $48 million.

Public Market Financing:

Adani Green Energy Limited (AGEL) – a renewable energy company that builds, owns and operates solar and wind power projects – raised ~$58.19 million through sale of 9.35 crore shares by promoters for maintaining minimum public shareholding norms.

Project Funding:

Clean Solar Power – a step-down subsidiary of Hero Future Energies Global (HFE) – received debt financing of up to $43.3 million from International Financial Corporation (IFC), the financial arm of the World Bank.

Sunseap Group – a Singapore-based renewable energy firm – secured ~$31.7 million green loan from the United Overseas Bank Limited (UOB).

Corporate M&A:

Indian pharmaceutical company Cipla acquired a 26 percent stake on a fully diluted basis in AMP Solar Power Systems. The acquisition cost has been pegged at $1.85 million.

Project Acquisition:

Mahindra Susten – the renewable business arm of Mahindra group – is to sell around 160 MW of solar assets at an enterprise valuation of close to ~$288 million.

Essel Infraprojects – the infrastructure arm of the Essel group – agreed to sell about 310 MW of solar energy assets to the Adani Group at a valuation of ~$259 million – $288 million.

Suzlon Energy has announced that it will sell two of its solar subsidiaries to Ostro Energy – a wholly owned subsidiary of independent power producer ReNew Power – for a total sum of ~$4.29 million. The two subsidiaries are Shreyas Solarfarms (Shreyas Solar) and Aalok Solarfarms (Aalok Solar).

Indian lead-acid battery manufacturer, Exide Industries (Exide) – entered into an agreement with Cleantech Solar to acquire up to a 30 percent stake in three SPVs, namely: CSE Solar Sunpark Tamil Nadu Private Limited, Greenyana Solar Private Limited and CSE Solar Sunpark Maharashtra Private Limited.

Japanese trading and investment company Mitsui – entered into an agreement with Indian engineering, procurement and construction company (EPC), Mahindra Susten, to develop and operate distributed solar projects in India jointly.

 

 

 

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