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Solar financing rebounds in Q3 with $3.2 billion in corporate funds: Mercom Capital Group

Our Bureau Hyderabad | Updated on October 13, 2020 Published on October 13, 2020

Total corporate funding in solar at $7.9 billion in first 9 months of 2020

After a weak Q2, corporate funding — including venture capital, private equity, public market, and debt financing — globally in the solar sector in Q3 2020 was up at $3.2 billion, compared to $2.3 billion in Q2, a 43 per cent increase quarter-on-quarter.

Funding was also higher by 8 per cent year-on-year compared to the same quarter last year, according to a Mercom Capital Group report.

The corporate funding was, however, still 13 per cent lower in the first nine months of 2020 with $7.9 billion compared to $9 billion raised during the same period in 2019.

“After declining in Q2, financing activity was up across the board, whether it was VC, private equity, public market, or debt financing — a clear sign the market is bouncing back after a prolonged shutdown. Transactions in the works that could not make progress in Q1 and Q2 closed in Q3, resulting in a funding surge. Project acquisition activity — an important indicator of the financial health in the solar sector — bounced back strongly in Q3,” Raj Prabhu, CEO of Mercom Capital Group, said in a statement.

“Solar stocks are on an incredible run so far this year. Of the 24 solar stocks Mercom tracks globally, 12 were up over 100 per cent at the end of Q3 — an unprecedented number,” Prabhu added.

VC funding

Global venture capital funding increased in Q3 with $183 million in 15 deals compared to $65 million in five deals in Q2, 182 per cent growth q-o-q. Funding was lower by 12 per cent y-o-y compared to $208 million raised in 11 deals in Q3 2019.

In the first nine months of 2020, VC funding in the solar sector was 61 per cent lower with $394 million compared to $1 billion raised during the same period in 2019.

Debt financing deals

In Q3 2020, announced debt financing came to $1.8 billion in 16 deals, a 20 per cent increase compared to $1.5 billion from nine deals in Q2 2020. Year-on-year, debt financing was up by 16 per cent. Solar debt financing activity in the nine months of 2020 was 6 per cent lower, with $5.4 billion in 32 deals compared to the year-ago period.

Six solar securitisation deals brought in almost $1.6 billion in 9M 2020. Even with Covid disruptions, project acquisition activity was up 52 per cent in 9M 2020, with 24.3 GW of solar projects acquired, compared to 16 GW acquired in the same period last year. In Q3 2020, 9.5 GW of solar projects were acquired, 244 per cent higher compared to 2.8 GW in Q2 2020. Acquisition activity was 119 per cent higher y-o-y, with 4.4 GW acquired in the same quarter last year.

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Published on October 13, 2020
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