Corporate Funding in Solar Sector Up 10 Per cent in Q1 of 2019: Mercom

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The VC funding for the solar sector stood at US$ 176 million from 13 deals in January-March quarter, as compared to US$ 161 million a year ago

Global corporate funding, including venture capital (VC) funding, public market and debt financing into the solar sector recorded a year-on-year increase of 10 per cent in the first quarter of 2019, according to a latest report by Mercom Capital Group.

Overall corporate funding into the solar sector in the given quarter was to US$ 2.8 billion as compared to US$ 2.5 billion raised in same quarter last year.

Commenting on the findings, Raj Prabhu, CEO, Mercom Capital Group, said, “Funding levels were up slightly year-over-year in Q1 2019, but the solar industry was on a much stronger footing at the beginning of this year compared to a year earlier, when the industry was hit with tariffs, subsidy and installation cuts in China, and a module oversupply situation.”

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“The market is upbeat, and solar equities rebounded strongly in the first quarter. However, China is still a wild card, and depending on its 2019 policy direction, it could have a significant impact on the solar industry,” he added.

Major funding in solar downstream companies

The VC funding globally for the solar sector stood at US$ 176 million from 13 deals in January-March quarter, as compared to US$ 161 million raised in 22 deals during the same period in 2018. Solar downstream companies received the majority of funding, with US$ 111 million in seven deals.

In the first quarter of 2019, the major companies raised funding include: Yellow Door Energy raised US$ 65 million, followed by Oxford PV with US$ 41 million, BBOXX raised US$ 37 million in two deals, Aurora Solar (US$ 20 million) and PEG Africa (US$ 5 million).

According to the report, US$ 247 million were raised in solar public market financing in three deals in the said period, compared to US$ 103 million in four deals last year.

During first quarter of 2019, the announced debt financings came to US$ 2.35 billion in 19 deals as compared to US$ 2.3 billion in 18 deals in the year-ago period. On the other hand, announced large-scale project funding reached a record high of US$ 5.68 billion in 43 deals during January-March 2019 as compared to US$ 2.7 billion raised in 57 deals in the corresponding period.

In Q1 2019, merger and acquisition (M&A) activity was stable with 18 solar transactions as compared to 19 transactions a year ago. Out of 18 transactions, 14 transactions involved solar downstream companies and two transactions each involved balance of system (BoS) firms and equipment manufacturers.

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