Solar Finance

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, according to the recently released Q1 2017 Solar Funding and M&A Report by Mercom Capital Group.

VC/PE Funding:

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).

Hero Future Energies, the renewable energy subsidiary of Hero Group, secured $125 million (~Rs.8.1 billion) in equity investment from the International Finance Corporation (IFC).

Oriano Solar, a provider of EPC services for solar projects in India, raised $3.1 million (~Rs.200 million) from Small Industries Development Bank of India’s Samridhi Fund to expand its team and finance working capital requirements.

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.

To learn more about the report, visit