January 10 (Renewables Now) - Total global corporate funding in the solar sector marked a 20% year-on-year increase to USD 11.7 billion (EUR 10.5bn) in 2019, statistics by Mercom Capital Group show.
The clean energy consultancy released the data in a new report on funding and merger and acquisition (M&A) activity in the solar sector on Thursday. The global total for 2019 includes venture capital (VC) and private equity (PE) funding, public market and debt financing, covering 117 deals. It compares with USD 9.7 billion in 139 deals in 2018.
The achieved growth, according to Mercom, is mainly a result of the higher debt financing activity in the first and last quarter of the past year. “Financial activity was up across the board in the solar sector in 2019 with venture funding, public market, and debt financing all increasing year-over-year,” said Mercom’s CEO Raj Prabhu, pointing out the initial public offerings (IPOs) and securitisation deals were also among the major contributors to the improved figures.
Global VC funding, including VC and PE, in 2019 rose to USD 1.4 billion from USD 1.3 billion a year before, with solar downstream companies accounting for 75% of the total VC/PE funding. Among the largest VC and private equity deals was the USD-300-million fundraising by Indian renewable power producer ReNew Power Ltd, the USD-150-million equity infusion received by India’s Hero Future Energies from Masdar, and the USD-144-million financing round by India’s Avaada Group. Mercom estimates that a total of 53 VC/PE deals were clinched in 2019, against 65 in 2018.
Solar public market financing in the past year climbed by 9% in annual terms to USD 2.5 billion, of which USD 1.3 billion raised in six IPO transactions. The largest one of these was the floatation of Chinese solar farm operator Xinyi Energy Holdings (HKG:3868), which raised USD 465 million in its Hong Kong IPO. Other major companies that went public in the reporting period include US residential solar installer Sunnova (NYSE:NOVA) and India’s Sterling and Wilson (BOM:542760), which reaped USD 168 million and USD 406 million, respectively.
Announced debt financing activity rose by 29% to USD 7.8 billion in 46 deals. The most prominent deal in this category was the USD-700-million senior notes offering of TerraForm Power, controlled by Canada’s Brookfield Asset Management Inc (TSE:BAM.A).
Announced large-scale project funding deals totalled USD 16.1 billion, up from USD 14.1 billion a year ago.
The reported M&A deals in 2019 were 65, compared to 82 transactions in 2018, of which the largest one was the USD-6.1-billion acquisition of Pattern Energy by Canada Pension Plan Investment Board (CPPIB). The total number of large-scale solar project acquisitions stood at 192, against 218 in the previous year.
About 26.1 GW of solar projects changed their ownership in 2019, compared to 29 GW in 2018. The activity was mostly spurred by project developers and independent power producers, which were responsible for 17 purchases with a combined capacity of over 8.1 GW.
(USD 1.0 = EUR 0.900)