Published on July 14th, 2015 | by Joshua S Hill2
Solar Funding Down In Q2’15, According To Mercom
July 14th, 2015 by Joshua S Hill
Solar funding was down slightly in Q2’2015, sitting at $5.9 billion, with project acquisitions rising to an impressive $2.9 billion, according to new figures released by Mercom Capital Group.
In a press release sent out to journalists, Mercom Capital released its report on solar funding and merger & acquisition (M&A) activity in the second quarter of 2015. Total global corporate funding for the solar sector — which includes venture capital and private equity (VC), debt financing, and public market financing raised by public companies — decreased on the first quarter to $5.9 billion, down from $6.4 billion.
“Overall corporate funding was down slightly this quarter,” said Raj Prabhu, CEO of Mercom Capital Group. “Yieldcos had a significant impact on the financial activity in the sector and raised $1.6 billion in public markets, about $800 million in debt, and accounted for almost a third of all large-scale project acquisitions. Residential and commercial solar funds continue to attract record funding as the ITC expiration deadline approaches.”
VC funding, on the other hand, dropped to $142 million across 24 deals, compared to the $195 million across 27 deals Q1’15 saw. The top 5 VC deals for the second quarter included a $40 million deal raised by Applied Solar Technologies, an off-grid solar energy service provider located in India, which acquired the funds from Future Fund, Bessemer Venture Partners, Capricorn Investment Group and International Finance Corporation.
Public market financing reached a record high of $2.3 billion in the second quarter of 2015, compared to the $1.3 billion raised in the first quarter of this year. The largest deal (excluding IPOs) was the $670 million raised by Abengoa Yield, followed by $408 million raised by Risen Energy, a Chinese solar PV manufacturer, and the $335 million raised by SunEdison, through its TerraForm Global Yieldco.
Debt financing fell this quarter to $3.4 billion, down from Q1’s $5 billion, with the top deal closed this quarter being the $1.3 billion loan secured by Chinese solar developer GCL New Energy from China Merchants Bank, Nanjing Branch.
Announced large-scale solar funding came to $1.9 billion across 26 deals, compared to $2.5 billion across 29 deals in Q1’15. The largest project in this sector was the $355 million raised by GE Energy Financial Services in partnership with Pacifico Energy for the development of a 92.6 MW solar PV project set to be developed in Hosoe, Kyushi Island, in the Miyazaki prefecture in Japan.
Q2 saw 17 corporate merger and acquisition transactions in the solar sector, compared to 29 in the previous quarter. The largest disclosed M&A transaction was the acquisition of RBI Solar, Rough Brothers Manufacturing, and affiliates (known collectively as RBI) for $130 million by Gibraltar Industries.
Finally, there were 66 large-scale solar project acquisitions which totaled $2.9 billion in the second quarter, with approximately 3.5 GW changing hands. This well exceeded the 44 transactions seen in Q1, which amounted to $953 million. The largest of these projects currently disclosed was the $669 acquisition of 450 MW worth of solar projects by Abengoa Yield.