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Wind venture capital funding tanks in second quarter

Venture capital funding for wind farms fell significantly in the second quarter of the year, a new report by Mercom Capital Group reports.

The drop to $17m in three deals follows a strong first quarter in which $240m was spread over 12 wind farm deals.

In the first quarter of this year, more than $240m went into 12 wind farm deals, the report. The top VC deals for the second quarter included $9.8m raised by ReGen Powertech and $7.5m raised by Southwest Windpower, both wind turbine manufacturers.

Large-scale project funding in the second quarter totaled $5.4bn in 23 deals. Onshore projects grabbed the majority of that, $4bn, while $1.4bn went to offshore projects.

The biggest large-scale project funding deals were for European offshore projects. In first place was the $741m raised by Belgian supermarket owner Colruyt for its 216 MW Northwind offshore wind farm. That was followed by $662m raised by Lincs Wind Farm Ltd. for its 270 MW wind farm off the coast of England. The largest investment in a U.S. project was the $650m raised by Terra-Gen Power for the developer’s 300 MW Alta Wind VII & IX wind projects in California.

Other top project funding deals included $444m raised by Invenergy for its 200 MW California Ridge wind energy project, and $379m raised by Iberdrola and Neoenergia for 10 wind farms totaling 288 MW, Mercom said.

Large-scale project funding investors with multiple deals during the second quarter included BNDES, KfW IPEX-Bank, Union Bank, Bank of Tokyo-Mitsubishi UFJ, BayernLB, EBRD, Lloyds, Rabobank and Santander.

In corporate mergers and acquisitions (M&A), second-quarter activity totaled $93m – including five transactions – compared to $872m in 11 transactions in the first quarter.

Mercom said the second-quarter M&A transactions included a $60m acquisition of Suzlon (Suzlon Energy Tianjin Ltd.), a wind turbine manufacturer, by China Power New Energy Development Co. and the $33m acquisition of Tellhow Wind Power, a wind blade manufacturer, by Simomatech.

There were 17 projects M&As announced in the second quarter, amounting to $705m in six disclosed transactions.

Project M&A activity was mostly outside of the U.S. Top project M&A transactions included the $301m acquisition of Agaoglu Group’s two Turkish wind farms (126 MW) by Dogan Sirketler Grubu Holding, and the $174m acquisition of AGL Energy’s Hallett 5 wind farm in Australia (52.5 MW) by Eurus Energy.

Other top transactions included the $85.5m acquisition of a 49% stake in each of four AES Corp. wind farms in China (120 MW) by Sembcorp, the $62m acquisition of the Dobrich wind farm (40 MW) by LUKERG Bulgaria, and the $42m acquisition of AES Southern Europe Holdings’ St. Patrick wind farm and three InnoVent projects by Boralex (90.5 MW).