After a Lull in Q2, Investments in Indian Solar Sector Up by 170% in Q3 2020

Investments in the Indian solar sector rose by 170% and stood at approximately $270 million (~₹19.9 billion) in the third quarter of 2020 (Q3 2020), compared to $100 million (~₹7.4 billion) in the previous quarter, according to Mercom’s Q3 2020 India Solar Market Update.  

Investments in Q3 were down by 69% compared to $1.56 billion (~₹115.5 billion) during the same period last year.

Compared to the last quarter, the increase in solar funding was attributable to the easing of the lockdown measures imposed due to the COVID-19 pandemic, which resulted in higher solar installations. The solar industry is gradually recovering, highlighted by the higher installations in Q3 2020 compared to the previous quarter. Investments stood at approximately $100 million (~₹7.46 billion) in Q2 2020.

In Q3 2020, a total of 283 MW of large-scale solar installations were added compared to 120 MW in the previous quarter. Year-over-year (YoY), large-scale installations saw a decline of 85% compared to the 1,932 MW of capacity additions in Q3 2019.

Investments in India Solar Sector

As per the data released by Mercom, the total corporate funding accounted for $57.40 million (~₹4.25 billion).

Deal Highlights

The Global Climate Partnership Fund (GCPF) announced that it had provided Indian solar rooftop developer CleanMax with a $10 million (~₹743.08 million) credit facility to help it expand operations in Southeast Asia, starting with Thailand.

Actis completed the acquisition of two solar projects with a total capacity of 400 MW from ACME Solar Holdings Limited. The deal is expected to be valued at nearly ₹25 billion (~$334 million). The projects have been acquired by Actis Lifelong Infrastructure Fund (ALLIF) and are located in the states of Andhra Pradesh and Madhya Pradesh.

In another deal, Ayana Renewable Power Private Limited, backed by the U.K.-based CDC Group, acquired First Solar’s two solar projects with a capacity of 40 MW. The company acquired two solar power projects located in Karnataka as a part of its expansion plans.

In September, Symbiotics, an investment firm specialized in emerging, sustainable, and inclusive finance, issued its first bond, the proceeds of which are exclusively used to finance renewable energy projects. It raised ₹1.26 billion (~$17.4 million) for Fourth Partner Energy, a distributed solar energy firm.

In Q3 2020, the Asian Development Bank announced that it had signed an agreement to invest $15 million (~₹1.1 billion) in Avaada Energy Private Limited to expand its solar generation capacity.

Total corporate funding (including venture capital funding, public market, and debt financing) in 9M of 2020 came to $7.9 billion (~₹584.9 billion) compared to $9 billion (~₹666.4 billion) in 9M 2019, a 13% drop year-over-year (YoY).

You can find the complete funding and M&A transaction list and details in Mercom’s 9 M and Q3 2020 Solar Funding and M&A Report.