Total corporate funding for solar sector tops $4.5 Billion in H1 2020: Mercom Capital Group

Our Bureau Hyderabad | Updated on July 10, 2020 Published on July 10, 2020

Total corporate funding, including venture capital, public market, and debt financing, during first half (H1) of 2020 came to $4.5 billion compared to $6 billion in 1H 2019, a 25 per cent drop year-over-year, according to a Mercom Capital Group report on H1.

“Financial activity in the first half of the year reflects the realities on the ground. Even though solar stocks have performed well, and corporate funding in Q2 looked slightly better because of several securitisation deals, global economies and solar activity are still far from being back to where they should be. Project acquisition activity, typically a sign of health in the sector, declined significantly in Q2,” said Raj Prabhu, CEO of Mercom Capital Group.

In all, it could have been worse considering the severity of the crisis, he said.

In H1 2020, global VC funding including venture capital, private equity, and corporate venture capital in the solar sector was 74 per cent lower at $210 million compared to $799 million raised in the first half of 2019.

Solar public market financing in H1 2020 was 24 per cent lower compared to the first half of 2019, with $758 million in six deals ($993 million in eight deals). Public market financing totalled $737 million in five deals in Q2 2020 ($746 million) compared to $22 million in one deal in Q1 2020.

Announced debt financing activity in the first half of 2020 ($3.6 billion in 15 deals) was 16 per cent lower compared to the first half of 2019 when $4.2 billion was raised in 27 deals.

There were four solar securitisation deals totalling $1.06 billion in 1H 2020. Cumulatively, $6.3 billion has been raised through securitisation deals since 2013. Funding in the residential and commercial solar funds totalled $1.2 billion in 1H 2020.

In 1H 2020 there were 25 solar corporate M&A transactions compared to 37 transactions in 1H 2019. The top transaction in the first half of 2020 was the divestment of Brookfield Renewable Partners' Thailand-based solar energy business, which was sold to PTT Public Company’s power and energy arm, Global Power Synergy Public Company, for $100 million.

Solar project acquisition activity was up in H1 2020 with 14.7 GW compared to 11.6 GW acquired in the same period last year. Only about 3 GW of solar projects were acquired in Q2 2020 compared to 5.7 GW in Q2 2019.

The report states that over 140 GW of solar projects have been acquired since 2010

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Published on July 10, 2020
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