The solar sector has attracted total funding of $3,857 million through 70 deals, including three Indian transactions, in the April-June period this year, says a report.
According to the Mercom Capital Group’s second quarter funding and M&A activity report for the solar sector, VC funding in the solar sector continued to be sub-par in the second quarter of 2013, with $189 million in VC funding in the April-June period compared with $126 million last quarter.
The report analysed funding on the basis of four categories — project funding, VC funding, debt funding and others.
Three Indian deals three were listed in the project funding category, while one, Fortum’s acquisition of a solar power plant in Rajasthan, was included in the project M&A category.
The three Indian deals in Q2 this year include Acme Solar’s $50 million loan for its 25-MW photovoltaic power plant in Madhya Pradesh, followed by Welspun Energy’s financial closure of its upcoming 20-MW solar power project in Maharashtra, wherein financial institutions have committed to long-term project funding of $22.5 million.
Further Welspun Energy, received around $8 million in funding from financial institutions for its Karnataka solar project.
Among the VC deals solar downstream companies received $128 million in funding, Mercom Capital said.
“With solar technology companies struggling, investments have been going to downstream companies,” Mercom Capital Group CEO Raj Prabhu said.
Prabhu further added that “investments in solar technology companies haven’t completely dried up. Small venture rounds are still going to several niche technology companies instead of the larger deals that were typical for thin film, CSP and CPV companies”.
Meanwhile, solar M&A activity in Q2 2013 amounted to $1.27 billion in 18 transactions.
“Themes emerging out of this quarter’s M&A activity included: consolidation in the inverter market, strategic acquisitions, and acquisitions of distressed assets/ companies,” Mercom Capital added.