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Solar projects make progress in attracting investors

Funding levels for solar projects in Q1 2019 were 10% higher than a year ago, but the solar industry has become more resilient.

A report by global clean energy communications and consulting group Mercom Capital shows that total corporate funding in the solar sector over the first three months of the year amounted to $2.8 billion, against $2.5 billion in Q1 2018.

“Funding levels were up slightly year-over-year in Q1 2019, but the solar industry was on a much stronger footing at the beginning of this year compared to a year earlier, when the industry was hit with tariffs, subsidy and installation cuts in China, and a module oversupply situation,” confirmed Raj Prabhu, CEO of Mercom Capital Group.

“The market is upbeat, and solar equities rebounded strongly in the first quarter. However, China is still a wild card, and depending on its 2019 policy direction, it could have a significant impact on the solar industry.”

Global venture capital (VC) funding for the solar sector in Q1 2019 amounted to US$176 million from 13 deals, against US$161 million from 22 deals in Q1 2018. Much of the funding in the latest quarter went to solar downstream companies, which attracted US$11.1 million from seven deals.

Fewer and bigger deals

The top VC deals in the period were: $65 million raised by Yellow Door Energy, $41 million by Oxford PV, $37 million secured by BBOXX, $20 million by Aurora Solar, and PEG Africas $5 million deal. A total of 28 VC investors participated in solar funding in Q1 2019.

Solar public market financing came to $247 million in three deals in Q1 2019, compared to $103 million in four deals in Q1 2018. Ginlong (Solis) Technologies had a rare initial public offering (IPO in Q1 2019.

Announced debt financings came to $2.35 billion via 19 deals during Q1 2019 compared to $2.3 billion in 18 deals in Q1 2018. There were three securitisation deals in Q1 2019, while announced large scale project funding touched a high of US$5.68 billion from 43 deals against US$2.7 billion from 57 deals in Q1 2018

Merger and acquisition deal activity in Q1 was stable with 18 solar transactions, 14 involving solar downstream companies, against 19 transactions in Q1 2018.

About 5.9 GW of solar projects were acquired in Q1 2019, with 18 investment firms and funds acquiring 20 projects in totalling 3.5 GW, and 14 utilities and IPPs picking up 19 projects totalling 1.15 GW, while 13 project developers acquired 14 projects for 803 MW.

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