The latest corporate financing report from Mercom Capital Group shows that solar downstream companies took the largest chunk of corporate funding for solar in the first quarter of 2017, raising $548 million in nine venture capital deals, from a total of 60 deals worth $3.2 billion.
Indian IPP Renew Power was among the quarter’s most active companies, securing a $390 million financing package from the Asian Development Bank, to fund several PV projects in India. The company also raised $200 million in VC funding from JERA, a joint venture of Tokyo Electric Power and Chubu Electric Power.
On top of the $390 million raised by Renew Power, First Solar obtained $241 million in non-recourse project debt from Mizuho Bank, for the 59.5 MW Ishikawa Sogo project in Japan, Next Energy Solar Fund secured a $188 million deal to refinance 241 MW of projects solar. 33 large scale project funding deals were made in Q1 2017 for a total $2.69 billion, says Mercom Capital Group.
Data from Mercom shows that M&A transactions in Q1 amounted to $4.7 billion, from 29 transactions. The largest of these was AES & Alberta Investment Management’s acquisition of FTP Power for $853 million cash and the assumption of $724 million in non-recourse debt.
Brookfield Asset management conducted two M&A transactions, acquiring solar yieldco TerraForm Global, a subsidiary of bankrupt SunEdison, for around $787 million cash, as well as a 51% stake in TerraForm Power for a further $622 million.
Recently privatized Trina Solar merged with Fortune Solar and Red Viburnum Company, the company was then acquired in a management buyout by an investor consortium led by Chairman and CEO Jifan Gao.
One solar IPO took place in the quarter, in January Clenergy Technology raised $55 million listing on the Shanghai Stock exchange.
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A recovery in renewables investment makes sense. The decline last year did not reflect any big potholes in the sector, or wider financial problems. It looks more as if the steep fall in costs caught investors by surprise. The projects they had signed up to just cost them less. It takes time for the project pipeline to respond to the new lower prices, and we are starting to see this.