Corporate funding in global solar sector falls by 18%: Mercom Capital

New Delhi: Corporate funding in the global solar sector declined by 18 percent to USD 18.7 billion in January-September 2022, according to a Mercom Capital report. Corporate funding includes venture capital and private equity, debt financing, and public market financing. "Total corporate funding for the first nine months stood at USD 18.7 billion which is 18 percent lower as compared to USD 22.8 billion raised in 2021. The number of deals increased by 17 percent, with 131 in nine months of 2022 as compared to 112 in nine months of 2021," the global clean energy consulting firm said in its report.

During January-September 2022, venture capital (VC) funding activity rose by 150 percent to USD 5.5 billion with 72 deals as compared to the USD 2.2 billion raised in 39 deals in the same period last year.

Dip in solar debt financing activity

In India, Navitas Alpha Renewables raised around 870,000 in seed round of funding. Renkube also secured around USD 3,00,000 in seed funding. While Prescinto Technologies raised USD 6.5 million in financing, Aerem raised USD 2.5 million in pre-Series A funding. Kohlberg Kravis Roberts (KKR) and the Hero Group are planning to invest USD 450 million in Hero Future Energies (HFE), the renewable energy arm of the Hero Group.

Globally, the announced solar debt financing activity in the first nine months of 2022 was USD 8.3 billion in 48 deals, a rise of 42 percent. But it was lower than USD 14.2 billion raised during January-September 2021 across 50 deals.

In India, Husk Power Systems, a distributed utility company that provides reliable power to rural communities and businesses entirely from renewable energy sources, signed a debt facility of USD 6 million from the EU-funded Electrification Financing Initiative.

"Corporate funding is behind pace, impacted by inflation and high-interest rates but is still ahead compared to the previous six years. There is renewed momentum after the passing of the Inflation Reduction Act (of the US). We have seen a resurgence in VC and private equity funding, breaking funding records since 2010," said Raj Prabhu, CEO of Mercom Capital Group.

(With PTI inputs)

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