Mercom Capital Group, llc, a clean energy communications and consulting firm, today released M&A and funding activity for solar, smart grid and wind sectors for the second quarter of 2010.
“In addition to tracking VC funding activity, Mercom is also paying close attention to project financing. While VC funding can be indicative of the health of the technology side of clean energy, project financing activity can indicate the health of the end markets. In the second quarter, we saw a lot of project financing and loans, giving us confidence that projects are getting funded, which was a big concern coming out of the recession. We also saw a lot more activity in both funding and M&A for Smart Grid,” commented Raj Prabhu, Managing Partner of Mercom Capital Group.
Total disclosed investments for the solar sector came in at $13.7 billion for 32 transactions compared to $1.7 billion for 30 transactions during Q1. The $11.7 billion in loans issued to Suntech and Trina Solar by the Chinese Development Bank skews these numbers heavily. Without these two loans, Q2 funding activity was only slightly higher than Q1. In addition to Suntech and Trina, other significant funding transactions in the sector included a $175 million private placement by Solyndra, a Series D raise by BrightSource Energy of $150 million, a Series B raise by Amonix of $129.4 million, a debt and equity raise by Solar Power Partners for $115 million, project financing secured by AES solar for $233 million and a credit facility secured by Sunpower for $350 million.
Merger and acquisition (M&A) activity for Q2 was relatively similar to Q1 activity with 12 M&A deals compared to 10 deals in Q1. Out of the twelve M&A transactions, only two of them were disclosed for a total of $298 million compared to the first quarter where six were disclosed for $784 million. A significant M&A transaction in the sector included the acquisition of NextLight by First Solar for $285 million.
Smart Grid saw a significant increase in both funding activity and M&A activity in Q2 compared to Q1. Total disclosed investments for the smart grid sector came in at $305 million for 12 transactions compared to $112.1 million for 15 transactions during Q1. A significant funding transaction in the sector included $165 million raised by Landis+Gyr.
Out of nine M&A transactions, two were disclosed for a total of $1.3 billion compared to the first quarter which had a total of 7 deals of which only one was disclosed for $10 million. Included in these totals was the Ventyx acquisition by ABB for an estimated $1billion and the acquisition of Teridian Semiconductor by Maxim for $315 million.
There was higher funding activity in the Wind sector in the second quarter of 2010 compared to Q1 due to an uptick in project finance and construction loan activity. Disclosed investments for the wind sector came in at $3.4 billion for 17 transactions out of a total of 19 transactions for the quarter. This compares to $1.4 billion for 15 transactions during Q1. Included in these totals were six significant transactions each over $300 million including project financing by Renewable Energy Systems Americas for $500 million, a $375 million loan for Acciona’s Eurus Windpark, a $302 million loan for Dong Energy, a $375 million line of credit for Duke Energy/Green Frontier Windpower, a $400 million equity financing by Pattern Energy and a $732 million credit line for China Windpower. Other transactions included equity financing by A2SEA for $141 million and equity financing by EDP Renovaveis for $141 million.
Out of 24 M&A transactions, seven were disclosed for a total of $515 million compared to the first quarter with a total of 7 deals of which only two were disclosed for $224 million. Significant transactions in the sector included the acquisition of Transfield Services’ MT Wind Farm by Meridian and the acquisition of the SC Wind Power Park by Petrom for $136 million.
According to the Department of Energy (DOE) $1.7 billion was spent in the second quarter of 2010 compared to 1.3 billion in Q1. DOE has spent a total of $4.85 billion so far, out of the $29 billion funding commitments from Recovery Act funding.
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