Venture capital (VC) investments and mergers and acquisitions (M&A) in the solar sector - as well as the wind energy sector and the smart-grid sector - improved slightly last year over 2009's numbers, according to a new report from Mercom Capital Group LLC, a global clean energy market intelligence, consulting and communications firm.
"Considering [that] 2009 was a recession year, solar was only slightly up in 2010. After a good second quarter, VC investments trended down in the third quarter and fourth quarter," says Raj Prabhu, managing partner at Mercom Capital Group.
For the solar market, total 2010 VC activity came in at $1.67 billion invested in 65 transactions, up 18% over 2009's numbers ($1.4 billion). There was increased activity in large-scale solar project funding, as well as debt and other funding types, pointing to an ease in the availability of credit after a challenging 2009, the report says.
A total of 148 different investors participated in VC funding rounds last year. Credit facilities provided to Chinese companies by Chinese banks came in at $34 billion, dwarfing all other transactions in solar.
Solar M&A transactions in 2010 totaled $2 billion, with 44 deals. Solar project M&A activity amounted to another $450 million in 18 deals - out of which only four were disclosed.
Large-scale project funding came in at $4.1 billion in 2010, while debt and other funding types logged in $36 billion, of which $34 billion were in the form of credit facilities provided by Chinese government banks to Chinese companies, including LDK Solar, Yingli Solar, JA Solar, Suntech and Trina Solar.
Notable VC transactions for the solar sector in 2010 included BrightSource Energy's VC raise of $176 million, followed closely by Solyndra’s raise of $175 million and Amonix, which secured a Series B raise of $129.4 million, the report adds.
Important project funding transactions included Torresol Energy for its Valle 1 and Valle 2 concentrating solar power (CSP) plants ($760 million), Abengoa Solar and JGC Corp. for a CSP plant ($451 million), SunPower for its California Valley Solar Ranch project ($450 million), and Abengoa Solar and ITOCHU Corp. for their CSP plant ($448 million).
The year's top five investors in solar included Good Energies, New Enterprise Associates, Applied Ventures, Draper Fisher Jurvetson and Polaris Venture Partners. Project funding investments were led by Mizuho Corporate Bank, Natixis, Unicredit Group, BNP Paribas and Centrobanca.
Among the top M&A transactions for solar this year, the acquisition of Etimex Solar by Solutia for $326 million - followed by Recurrent Energy by Sharp Corp. for $305 million - leads the list, closely followed by NextLight Renewable Power by First Solar for $285 million and SunRay by SunPower for $277 million.
Total VC funding for the solar sector in the fourth quarter came in at $238 million for 16 transactions, of which 14 were disclosed, compared to $169 million for 11 disclosed transactions in the third quarter. Project funding came in at $2.32 billion in 14 disclosed deals out of a total of 15 deals.
At $669 million, there was a surge in M&A activity during the fourth quarter, compared to $586 million in the third quarter. Out of 27 M&A transactions in the fourth quarter, eight were disclosed, which was the same in the third quarter, Mercom Capital says. Significant M&A transactions included the acquisition of Glory Silicon Technology Investments (Hong Kong Lts.) by Suntech Power Holdings for $127 million and the acquisition of Sino Light Investments by Solargiga Energy Holdings for $108 million.
The full reports for the solar, wind and smart grid sectors are available here.
SOURCE: Mercom Capital Group
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