Mercom Capital Group, llc report on funding and mergers and acquisition activity for the wind sector during calendar year 2012 reveals that venture capital funding in the sector was lower than 2011.
The report states that the global wind energy sector which was looking for more clarity on policies, markets and investments came out of a very uncertain 2012 with venture capital funding amounting to nearly $315 million in 22 deals ($369 million from 14 deals in 2011).
The highlight for the Indian wind energy sector during the year was that out of the top five corporate venture capital funding deals, three were Indian companies ($20.2 million raised by ReGen Powertech, a wind turbine maker, $18.6 million raised by Leap Green Energy, an independent power producer, and $15.3 million raised by Trishe Developers, a wind power infrastructure company).
Indian companies also announced deals in project and debt funding and corporate and project mergers and acquisitions, the report reveals.
Of the 22 global deals in 2012, there were 10 downstream companies (eight project developers, one EPC and one O&M company). Besides, 10 turbine companies (mostly small wind turbine makers), one monitoring software and one airborne wind company also received funding.
“While venture capital funding into new technology companies was sparse, it does not indicate a lack of innovation in the sector as a lot of large manufacturers with their own research and development divisions spend millions of dollars to improve efficiencies and come up with new designs and innovations,” said Raj Prabhu, Managing Partner of Mercom Capital Group.
“For a sector still dependent on subsidies, there is still a lot of room for investments in new designs and technologies that reduce costs and increase efficiencies,” he said.
The top deal in 2012 was $183 million raised by Element Power, a developer, owner and manager of wind and solar projects in United States, South America and Europe.
The global clean energy communications and consulting firm tracked approximately $14 billion in 71 announced large-scale project funding deals in 2012. Almost $4.2 billion in 22 deals came in the fourth quarter of the year. In comparison, large-scale project funding announcements in 2011 came to approximately $11 billion in 52 deals.
Top project funding investors in 2012 included Union Bank with seven deals, EBRD and KfW IPEX-Bank with six deals and JP Morgan and Rabobank with five deals apiece.
There were 35 corporate acquisitions in the wind sector in 2012 compared to 17 in 2011. The acquired companies included 12 downstream companies, seven manufacturers, eight wind component companies, six service providers and two balance-of-system (BOS) companies.
Mercom also noted it was a very active year for large-scale wind project mergers and acquisitions. There were 72 large-scale project acquisitions totalling $8.8 billion compared to 61 transactions totalling $4.1 billion in 2011.
Some active acquirers of large-scale wind projects included investment funds, Independent Power Producers (IPP), Utilities, project developers, insurance companies, and service providers.