Solar funding surge in Q3 as global M&A activity bounces back from pandemic impacts

Phase 1 of the Mohammed bin Rashid solar park in Dubai. Image: DEWA.

Global solar industry funding has rallied from a turbulent first half of the year as project acquisition activity soared in Q3, a report from Mercom Capital Group says.

Around 9.5GW of solar projects were bought in the third quarter, more than double the 4.4GW in Q3 2019 and 244% higher than the second quarter of this year. Investment firms were said to be the most active project acquirers in Q3 2020 followed by project developers and independent power producers.

“Transactions in the works that could not make progress in Q1 and Q2 were getting closed in Q3, resulting in a funding surge. Project acquisition activity – an important indicator of the financial health in the solar sector – bounced back strongly in Q3,” said Raj Prabhu, CEO of Mercom Capital Group.

He added that solar stocks are on an “incredible run” this year, with 12 of the 24 stocks that Mercom tracks globally up 100% at the end of Q3, an unprecedented increase.

According to the consultancy, the top large-scale project funding deals in terms of capacity for Q3 were for the 900MW fifth phase of the Mohammed bin Rashid Solar Park in Dubai, the 800MW Siraj-1 project in Qatar and sPower’s 620MW Spotsylvania Solar facility in the US.

Figures for the first nine months of the year reveal the extent of the downturn caused by the pandemic: total corporate funding stood at US$7.9 billion, a 13% drop year-on-year, while venture capital funding was 61% lower at US$394 million. Solar debt financing activity from January to September was 6% lower than the same period last year.

According to Mercom, the top solar venture capital deals in the first nine months of 2020 were: the US$72 million by Sunseap Group, US$50 million by Zero Mass Water and US$40 million by Ecoppia.

Tags: mercom capital group, finance, investment, covid-19, covid-19 recovery