VC Funding in solar power sector down: Mercom Capital

V. Rishi Kumar Hyderabad | Updated on January 15, 2013 Published on January 15, 2013

Global Venture Capital (VC) investments plunged nearly 50 per cent to $992 million in 103 deals in 2012 compared to $1.9 billion raised in 108 deals in 2011.

The funding in 2012 represents the lowest amount since 2007, according to Mercom Capital Group.

"The slowdown in VC funding can be attributed to the grim prospects for thin-film, concentrating solar and concentrating PV technologies," Raj Prabhu, Managing Partner of Mercom Capital Group, said.

"The diminished funding activity is not a true reflection of the health of the solar sector. Global solar installations set to grow by around 10-12 percent this year," he said.

Corporate M&A activity in solar amounted to $6.7 billion in 52 transactions compared with $4 billion in 65 transactions in 2011.

Debt funding in 2012 came in at $6.9 billion in 34 deals, compared with $19.9 billion in 41 deals in 2011 and $35.7 billion in 29 deals in 2010.

Mercom tracked 35 solar companies that filed for insolvency or bankruptcy protection during 2012.

Among some project developments, Megha Engineering and Infrastructures Limited signed a 15-year term loan backing development of a 50 MW solar project in Anantapur. Welspun Energy secured a long-term project funding for a 50 MW solar PV project in Rajasthan from a consortium of lenders comprising three PSU Banks.

Mahindra Suryaprakash secured a loan from The Export-Import Bank of the United States to construct two solar photovoltaic plants of 20 MW and 10 MW in Rajasthan.

IFC provided debt finance to Mahindra Solar One for a 5 MW solar power project in Rajasthan. Azure Power received loan from IFC for a 2.5 MW rooftop solar power project in Gandhinagar, Gujarat.

In another transaction, Azure secured long-term financing from the Export Import Bank of the United States to expand its 5 MW solar PV project to 40 MW in Nagaur, Rajasthan.

Reliance Power secured a loan from Asian Development Bank (ADB) for its 100 MW project in Rajasthan

Published on January 15, 2013
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