Wind sector acquisition activity ramps up

23.01.2015

Global venture capital (VC) funding in the wind sector decreased to US$ 311 million in 2014 compared to US$ 455 million in 2013. Total funding into the wind sector reached US$ 31.7 billion in 2014 including VC funding, public market financings, debt financings, and announced project funding deals.

Mercom Capital Group, llc released its report on funding and merger and acquisition (M&A) activity for the wind sector for 2014. Thus, the top VC funded company in 2014 was ReNew Power Ventures, a wind and solar power producer, which received US$ 140 million. This was followed by BluEarth Renewables, a private independent renewable power producer, which received equity financing of approximately US$ 71 million, and STX France, a provider of offshore construction to renewable marine energy and oil and gas markets, which raised US$ 27 million.

Public market financings accounted for US$ 3.7 billion in 16 deals in 2014 including three IPOs (one Yieldco) totalling US$ 578 million. Announced debt financing amounted to US$ 7.7 billion in 23 deals in 2014, more than double the US$ 3.8 billion in 10 deals in 2013. Announced large-scale project funding in 2014 amounted to US$ 2019.9 billion in 120 deals compared to US$ 18 billion in 114 deals in 2013. There were a total of 139 investors that participated in project funding in 2014.

The most active project funding investors were KfW IPEX-Bank with nine deals, followed by Brazilian Development Bank (BNDES) with eight deals, and Banco Santander, Bayerische Landesbank New York Branch (BayernLB), and Eksport Kredit Fonden (EKF) with seven deals each.

It was a strong year for M&A activity in the wind sector in 2014 with 28 transactions, 12 of which were disclosed for a combined US$ 4.6 billion. “There has been a significant jump in the number of Yieldcos entering the renewable energy space, and for Yieldcos to grow they must continually add new projects to their portfolio. We will see a lot more Yieldcos jumping into the wind sector in the near future and start actively acquiring quality wind projects worldwide,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

Of the 28 M&A transactions in 2014, wind downstream companies accounted for 20 of them, followed by service providers (four) and wind component companies (two). Manufacturers and BOS companies accounted for one transaction each. The top disclosed M&A transaction in 2014 was the US$ 2.4 billion acquisition of First Wind, a developer of wind projects, by SunEdison, and its Yieldco company TerraForm Power.

Katharina Garus

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