A total of 117 deals in the solar industry in 2019 ensured $11.7 billion was raised globally, 20% more than in 2018, something that Mercom Capital attributes to large debt financing activity last year. (Source: Mercom Capital Group)
- Mercom’s report claims $11.7 billion to have come to the global solar industry in the form of total corporate funding in 2019
- In this, VC and PE segment added $1.4 billion , growing from $1.3 billion in 2018
- Six IPO’s raised $1.3 billion to take total public market financing to $2.5 billion, an annual increase of 9%
- Debt financing in the form of 46 deals led to $7.8 billion secured as debt financing
- $16.1 billion was the total announced large-scale project fundingamount raised led by $2 billion as top project funding deal for Noor Energy 1 Solar Project
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Global corporate funding of $11.7 billion to the solar sector in 2019 shows the year was a ‘strong’ one for the industry, as it grew by 20% annually compared to $9.7 billion in the previous year (see PV Funding Dropped 24% YoY In 2018).
Mercom Capital Group makes these assertions in its 2019 Q4 and Annual Solar Funding and M&A Report stating that the increase came in the form of 117 deals and was mainly due to large debt financing activity in Q1/2019 ($2.7 billion) and Q4/2019 when the funding amount would have been $2.7 billion since during 9M/2019 the additions were $9 billion (see Global Corp Funding In 9M/2019 Improved 34% YoY).
During the year, $1.4 billion came in as 53 deals from global venture capital/private equity (VC/PE) segment, up from $1.3 billion in 2018 with ReNew Power of India raising $300 million through a rights issue, followed by Hero Future Energies securing $150 million and Avaada Energy getting $144 million. Together Indian downstream solar companies raised close to $650 million last year, the report claims.
In the public market financing segment, there was an annual increase of 9% to $2.5 billion with five of the solar stocks increased more than 50%, and four equities growing up over 100%. There were six initial public offerings (IPO) that added up to $1.3 billion in which the largest was that of China’s Xinyi Energy Holdings raising $465 million.
The Mercom report tracked debt financing activity to $7.8 billion in 46 deals, growing 29% YoY with eight securitization deals bringing in $1.6 billion.
Announced large-scale project funding deals were 152 in number raising $16.1 billion, compared to 184 deals with $14.1 billion reported in 2018. Top project funding deal was $2 billion for Noor Energy 1 Solar Project (see ACWA Power Closes Financing For 950 MW).
“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 Raj Prabhu, CEO of Mercom Capital Group. “Solar equities also had a great year with six solar IPOs around the world, and strong debt financing activity, including securitization deals, rounded off a strong year for the sector.”
During the entire year 2019, there were 65 merger and acquisition (M&A) deals, growing from 82 transactions a year back and the top deal in this segment was acquisition of Pattern Energy by Canada Pension Plan Investment Board for $6.1 billion (see Canada Pension Fund Buys North American RE Company).
Project acquisitions in the solar industry led to 192 deals with about 26.1 GW exchanging hands, the activity dropping 8% annually. Most of the acquisitions were made by project developers and independent power producers (IPP) that took over 8.1 GW, followed by investment firms and funds with 1.5 GW and electric utility companies with 228 MW.
“Investment firms acquired over 30 GW of large-scale solar projects in the past five years, a reflection of solar’s attractiveness as a long-term, low-risk investment,” added Prabhu.
Mercom Capital’s corporate funding report can be purchased on its website with prices ranging between $599 to $799.