Mumbai: Indian renewable energy companies have raised over $1.62 billion during the first quarter of 2017 in transactions ranging from venture capital (VC) funding, debt financing, project funding and merger and acquisitions (M&A), according to data from Mercom Capital Group Llc., a global clean energy consulting firm.
Transactions in Indian solar and renewable energy companies made up for nearly half of the total global funding raised by solar companies around the world in the first three months of 2017. The global solar sector raised total corporate funding of $3.2 billion in the first quarter of 2017—nearly double of $1.6 billion raised in the fourth quarter of 2016, Mercom said in a report on Thursday. This included venture capital funding, public market and debt financing.
The growth in the first quarter is higher by 15% when compared with the total corporate funding of $2.8 billion raised in the first quarter of 2016, the report said. In its study, Mercom tracked 233 new large-scale project announcements worldwide in the first quarter of 2017, totaling 12.7 gigawatt (GW).
Large Indian transactions included ReNew Power Ventures Pvt. Ltd securing $200 million from a joint venture between Tokyo Electric Power and Chubu Electric Power, Greenko Energy Holdings raising $155 million from an affiliate of GIC, and Hero Future Energies securing $125 million from International Finance Corporation (IFC).
ReNew Power also raised $475 million through its subsidiary Neerg Energy by selling green bonds to overseas investors and also secured $390 million in project funding from Asian Development Bank. Welspun Renewables Energy Pvt. Ltd (WREPL), now owned by Tata Power Co. Ltd, raised $176.27 million through issuance of non-convertible debentures on a private placement basis.
Solairedirect, a French solar project developer, through its India unit, secured a $100.4 million loan from IDFC for the construction of its two solar projects, while India Power Green Utility, a subsidiary of India Power, acquired a 49% stake in two solar project companies from Punj Lloyd Infrastructure.
“Q1 funding levels were up in the solar sector from the 2016 lows, largely due to increased debt financing activity. Corporate funding never reached $3 billion in any of the quarters in 2016. M&A activity was also strong with several large deals. Solar public companies also had a good first quarter," said Raj Prabhu, chief executive, Mercom Capital Group.
Global VC funding (venture capital, private equity, and corporate venture capital) for the solar sector saw a 78% rise in the first quarter of 2017 with $585 million in 22 deals compared to $329 million raised in the same number of deals in the fourth quarter of 2016, the report said. The amount raised was also higher when compared to $406 million raised in 23 deals in the first quarter of 2016.
There were 29 solar M&A transactions in the first quarter of 2017 compared to 20 transactions in the fourth quarter of 2016 and 14 transactions in the first quarter of 2016. About 7.4 GW of solar projects were acquired in the quarter compared to 5 GW in the previous quarter, Mercom said.
However, residential and commercial solar funds dropped to $630 million sequentially from $1.5 billion, the report said.