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Renew | February 2014

Global wind project funding reaches $18 bn

Global venture capital (VC) funding in the wind sector increased by 44 per cent in 2013 to $455 million as compared to 315 million in 2012, reports Mercom.

Although there was muted growth in the Indian wind energy sector in terms of project execution, the sector remained upbeat in terms of fund raising in 2013. Indian firm ReNew Power remained at the top, which raised $135 million.

Global venture capital (VC) funding in the wind sector increased by 44 per cent in 2013 to $455 million as compared to 315 million in 2012. Total funding into the wind sector has thus reached $28.1 billion in 2013, including VC funding, public market financings, debt financings and announced project funding deals. VC funding in Q4 2013 came to $93 million in six deals compared to $135 million in four deals the previous quarter, according to a recent report released by Mercom Capital Group, a global clean energy communications and consulting firm.

There were seven downstream companies that raised a combined $374.3 million in 2013. Six small wind turbine manufacturers raised $68.8 million. One wind component company raised $6.2 million and three monitoring software companies raised $5.5 million. In addition to this, public market financings accounted for $5.8 billion in 17 deals in 2013 including six IPOs totaling $2.3 billion.

Announced large-scale project funding in 2013 amounted to $18.1 billion in 114 deals, compared to $14 billion in 72 deals in 2012. There were 150 investors that participated in project funding in 2013. The most active project funding investors were KfW IPEX-Bank with nine deals, followed by the European Investment Bank with seven deals, and Nord/LB with six deals. Announced large-scale project funding in Q4 2013 ($4.9 billion in 32 deals) increased compared to Q3 2013 ($3.9 billion in 21 deals).

Q4 2013 was a very active quarter for large-scale project development activity around the world. Mercom tracked about 104 project announcements totaling almost 10.7 GW in various stages of development.

It was a strong year for M&A activity in the wind sector in 2013 with 33 transactions, 18 of which were disclosed for a combined $2.6 billion. By comparison, 2012 saw 35 transactions.

Of the 33 M&A transactions in 2013, wind downstream companies accounted for 20 of them, Wind Component companies accounted for six, service providers and Manufacturers accounted for three each, and BOS companies accounted for one transaction.

The top M&A transaction in 2013 was the $1.25 billion acquisition of Kaydon Corporation, an industrial manufacturer and supplier of wind turbine bearings, by SKF Group, a global supplier of bearings, seals, mechatronics, lubrication systems, and other services. This was followed by the acquisition of the Polish onshore wind business of DONG Energy, a company involved in procuring, producing, distributing, and trading in energy and related products, by two Polish power utilities, Polska Grupa Energetyczna and Energa, for $314 million. Brookfield Renewable Energy Partners, an operator of pure-play renewable power platforms, acquired vertically-integrated renewable energy production company Western Wind Energy for $182 million. Private-equity firm Actis acquired 60 per cent of Atlantic Energias Renovaveis, a Brazilian renewable energy company, for an initial commitment of $169 million. Rounding out the top five transactions was the acquisition of wind energy developer Salus Fundos de Investimento em Participacoes by Brazilian utility Copel for ~$128 million.

Disclosed project acquisitions increased in 2013 with 116 transactions compared to 72 transactions in 2012, representing over 16 GW that changed hands. There were 37 project acquisitions in Q4 2013 compared to 26 in Q3 2013.

The top five large-scale wind project acquisitions in 2013 included the acquisition by SEAS-NVE, of an 80 per cent stake in the 207 MW Rodsand II offshore wind project from E.ON, for $577 million; Portland General Electric´s acquisition of Puget Sound Energy´s 267 MW Lower Snake River Phase II Wind Project for $535 million; Blue Energy´s acquisition of the 177 MW RidgeWind portfolio from HgCapital for $392 million; Scottish and Southern Energy´s acquisition of the 99 MW Dunmaglass Wind Project from Renewable Energy Systems for $305 million; and Iberdrola Renewables Polska´s sale of 184.5 MW of wind projects to Polish companies Energa Hydro and Polska Grupa Energetyczna for $265 million.

Announced debt financing amounted to $3.8 billion in 10 deals in 2013, compared with $12.5 billion in 16 deals in 2012. There were 34 new cleantech and wind related funds announced in 2013  14 were announced in the fourth quarter.

The top VC funded company in 2013

  • ReNew Power raised $135 million
  • Mainstream Renewable Power raised $133 million
  • NSL Renewable Power raised $60 million
  • Ogin (formerly FloDesign) raised $55 million
  • Green Infra raised $25 million.

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