The corporate funding in the global solar sector has declined by 11 per cent year-on-year to USD 12 billion in January-June 2022, a Mercom Capital report released on Friday said. Corporate funding includes venture capital and private equity (VC), debt financing, and public market financing.
“Total corporate funding (including venture capital funding, public market, and debt financing) in 1H 2022 stood at USD 12 billion, 11 per cent lower compared to the USD 13.5 billion raised in 1H 2021,” the global clean energy consulting firm said in its latest report.
In January-June 2022, venture capital (VC) funding activity increased 125 per cent to USD 3.7 billion across 53 deals compared to the USD 1.6 billion in 26 deals in the year-ago period.
In India, rooftop solar startup SolarSquare raised USD 4 million in a seed funding round led by Good Capital with participation from US-based Lowercarbon Capital, Singapore-based Symphony Asia, and Zerodha founder Nithin Kamath’s Rainmatter under the VC category. SustVest raised USD 160,000 from angel investors.
Solar public market financing during the period under review fell 10 per cent to USD 3.3 billion in eight deals, from USD 3.7 billion in 13 deals in 1H 2021.
Under the public market finance segment, Abu Dhabi-based strategic investment firm International Holding Company announced the completion of a “USD 2 billion investment transaction in the Adani Portfolio companies: Adani Green Energy, Adani Transmission and Adani Enterprises – through the preferential allotment route. Adani Green will receive USD 500 million out of this investment”.
The debt financing activity in 1H 2022 dropped 39 per cent to USD 5 billion in 30 deals, from USD 8.2 billion raised through 32 deals a year ago. In debt financing, Azure Power agreed to invest USD 12.9 million in Premier Group, a solar cell and module manufacturer. “The current state of the economy — inflation, higher interest rates, supply chain issues — has started to impact fundraising in the solar sector. Even though the first half numbers held up, there was a pronounced slowdown from Q1 to Q2 (April-June).
“Besides venture and private equity funding, all other areas experienced a decline in financing activity. But, the value of solar is more evident than ever to markets that are dependent on energy imports. Clean energy installation goals are being ramped up around the world, and solar is a long-term beneficiary of this trend,” said Raj Prabhu, CEO of Mercom Capital Group.
Categories: Investment Reports
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