Indian Solar Sector Witnessed $1.6 Billion In Funding And M&A Transactions In Q1 2017: Mercom Capital

Mercom Capital in its report states that ReNew Power was the highest funded company raising VC (venture capital), debt and project funding during the quarter.

Renewable Energy Minister Piyush Goyal recently informed Rajya Sabha that India has added 5525 MW solar power generation capacity last fiscal, taking the total from this clean source to 12288 MW. According Mercom Capital with solar installations crossing 12 GW by end of March 2017, financial activity was robust in the first quarter of 2017, with approximately $1.6 billion (Rs.106 billion) in announced corporate, project funding and M&A deals.

As per the report from the global clean energy communications and consulting firm, ReNew Power was the highest funded company raising VC (venture capital), debt and project funding during the quarter.

Here is the complete report

VC/ PE Funding

Recently ReNew Power, an India-based renewable energy project developer, secured $200 million (Rs.12.9 billion) in funding from JERA (a joint venture between Tokyo Electric Power and Chubu Electric Power, two of Japan’s largest utility companies) for a 10 percent stake in the company.

Greenko Energy Holdings, an owner and operator of renewable energy projects, signed definitive agreements for an equity raise of $155 million (Rs.10 billion) from an affiliate of GIC and an entity that is ultimately wholly-owned by the Abu Dhabi Investment Authority (ADIA).

In January this year Hero Future Energies Raises USD 125 Million (Rs.8.1 billion) from World Bank’s private investment arm International Finance Corporation (IFC) to fund RE projects

Just last month Mumbai-based startup Oriano Solar raised series A funding worth Rs 20 crore from Samridhi Fund, which is managed by SIDBI Venture Capital Ltd, a wholly-owned subsidiary of Small Industries Development Bank of India (SIDBI). The fund will be used to finance working capital requirements and expand 45-member team by adding at least 25 people in business development and technology.

Debt Financing:

In Q1 2017, ReNew Power raised $475 million (Rs.30.7 billion) through the sale of green energy bonds to overseas investors. Bank of America Merrill Lynch, JP Morgan, and HSBC were some of the bankers involved in arranging the deal.

Welspun Renewables Energy (WREPL), a renewable energy project developer acquired by Tata Power (an electric utility company), raised approximately $176.3 million (~Rs.12 billion) through issuance of non-convertible debentures on a private placement basis.

Announced Project Funding:

Approximately $490.4 million (Rs.32 billion) in project funding was announced in Q1 2017. This is slightly higher than the project funding announced in Q4 2016, which was $369 million (Rs.25 billion). ReNew Power secured a $390 million (Rs.25.2 billion) financing package from the Asian Development Bank (ADB) for the development of renewable energy projects in India. Solairedirect, a French solar project developer, through its special purpose vehicle – Solaire Surya Urja – secured a ~$100.4 million (~Rs.6.75 billion) loan from IDFC for the construction of two solar projects totaling 140 MW at the Bhadla Solar Park in Rajasthan.

Project Acquisition:

India Power Green Utility Private Limited (IPGUPL), a wholly owned subsidiary of India Power Corporation Limited, acquired a 49 percent stakes in PL Sunrays Power and PL Renewable, a wholly owned subsidiaries of Punj Lloyd, at an undisclosed amount.

Solar Funds:

There were two new renewable energy and solar-focused funds in Q1 2017 which totaled $313 million (Rs.20.3 billion).The European Investment Bank (EIB) approved a EUR200 million (Rs.13.8 billion), 20-year loan to the State Bank of India (SBI) which will be utilized to help develop large scale solar projects in India. The World Bank has approved $100 million (Rs.6.5 billion) to develop solar parks in India. This includes a $75 million (~Rs.4.8 billion) loan from International Bank for Reconstruction and Development that will mature in 19 years and has a five-year grace period, a $23 million (Rs.1.5 million) loan from the Clean Technology Fund (CTF) which has a 10-year grace period and a maturity of 40 years, and a $2 million (Rs.129 million) interest-free CTF grant. The Shared Infrastructure for the solar parks project will establish large-scale solar parks in the country and support the Government of India’s plans to install 100 gigawatts (GW) of solar power by 2022.