solar sector: Global corporate funding in solar sector nearly doubles to $27.8 bn in 2021: Mercom Capital
Corporate funding includes venture capital and private equity (VC), debt financing, and public market financing.
In its latest report, the global clean energy consulting firm said the total worldwide corporate funding in the solar sector in January-December 2021 soared to USD 27.8 billion compared to USD 14.5 billion raised in 2020. Corporate funding in 2021 was the highest in ten years.
Mercom Capital Group CEO Raj Prabhu said 2021 was the best year for solar corporate funding and mergers and acquisitions since 2010. Financing activity bounced back strongly, following a COVID-19-affected 2020.
There was more money than ever chasing deals, and more demand than supply of attractive companies and assets as organisations and funds look to fulfil their ESG and clean energy mandates, he added.
The global venture capital and private equity funding in the solar sector in 2021 came to USD 4.5 billion, registering a rise of 281 per cent from USD 1.2 billion garnered in 2020. There were 11 VC funding deals of over USD 100 million apiece in 2021.
In India, Oorja Development Solutions, an off-grid solar services provider, secured USD 1 million in seed funding from Schneider Electric Energy Access Asia (SEEAA).
In 2021, the public market financing segment raised USD 7.5 billion, which was 49 per cent higher compared to USD 5.1 billion in 2020.
Debt financing came to USD 15.8 billion, a 91 per cent increase compared to USD 8.3 billion raised during 2020. In India, in the debt funding segment, Virescent Renewable Energy Trust (VRET) raised USD 288.4 million through listed non-convertible debentures and long-term debt financing.
“Merger and acquisition (M&A) activity in the solar sector soared with 126 transactions in 2021 – the highest number of deals ever recorded.
“Most of the transactions involved solar downstream companies. The largest transaction in 2021 was Adani Green Energy Limited (AGEL), which acquired a 100 per cent stake in SB Energy India at an enterprise valuation of approximately USD 3.5 billion,” the report said.
In the domestic M&A segment, Reliance New Energy Solar, the green energy arm of Reliance Industries, signed an agreement with Shapoorji Pallonji and Company to acquire a 40 per cent stake in Sterling and Wilson Solar, a solar engineering, procurement, and construction company, through a combination of primary investment, a secondary purchase, and an open offer.
Reliance New Energy Solar also acquired REC Solar Holdings from China National Bluestar Group for USD 771 million.
Sharing details of the project M&A deals, it said, France-based solar developer Technique Solaire acquired a 34 MW ground-mounted solar project in Uttar Pradesh from the Jakson Group and businessman Ravi Goyal. Another company, Ayana Renewable Power, signed a deal to acquire a 100 per cent equity stake in a 250 MW solar PV project developed and operated by ACME Solar Holdings.
Virescent Renewable Energy Trust acquired a 49 MW solar portfolio from five special purpose vehicles (SPVs) of Focal Energy for USD 46.7 million.
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