New clean energy investment decreases 2% to $74.9 billion in Q2 15

July 19, 2015 |

In New York, Clean Energy Pipeline reported that new investment in the global clean energy sector totaled $74.9 billion in Q2 15, a 2% decrease on Q2 14 ($76.5 billion). Despite the annual decrease, investment was still 11% above the average quarterly volume of investment during the past three years ($67.2 billion).

New investment was robust due to a 9% annual surge in project finance to its highest level in the last four years. This was attributable to a small number of large offshore wind and solar deals, rather than a swell of deal activity.

The trends

Clean energy project finance totalled $53.1 billion in Q2 15, a 9% increase on the $48.8 billion invested in Q2 14. In fact, Q2 15 was the largest quarter for clean energy project finance in the last four years. Despite the annual increase, the number of project finance deals declined 13% annually to 453 deals. This is more than 10% below the average quarterly number of deals during the past five years (522).

Clean energy companies and funds raised $4.7 billion through a combination of IPOs, secondary offerings and convertible notes last quarter, an 11% decrease on the $5.3 billion invested in Q2 14, but 18% above the quarterly average volume of funds raised since the beginning of 2013 ($4.0 billion).

YieldCos accounted for approximately half ($2.4 billion) of all funds raised in Q2 15. In addition to 8point3 Energy Partners’ IPO ($420 million), TerraForm Power ($688 million), Abengoa Yield ($670 million), NRG Yield ($288 million), TransAlta Renewables ($159 million) and NextEra Energy Partners ($109 million) all completed secondary or convertible note offerings last quarter.

Some 250 acquisitions of clean energy companies and projects totalling $12.0 billion were announced in Q2 15, a 23% decrease in value on the 312 deals totalling $15.5 billion in Q2 14. However the number of announced deals dropped to its lowest level since Q1 13.

The value of M&A activity remained robust despite the decrease in the number of transactions due to a handful of acquisitions of very large portfolios of solar projects. For example, United Photovoltaics Group acquired 17 operating solar PV projects located in China totalling 930 MW from Hareon Solar for $1.4 billion in May, while Abengoa Yield acquired in the same month a 371 MW portfolio of CSP projects located in Spain and South Africa from parent company Abengoa for $669 million.

Venture capital and private equity funds invested $1.1 billion (excluding private equity buyouts) in the global clean energy sector in Q2 15, in line with the $1.1 billion invested in Q1 15 but less than half the $2.3 billion invested in Q2 14. The sluggish first half of the year means venture capital and private equity investment is on track to record its lowest annual level in 2015 since Clean Energy Pipeline began tracking investment in 2008.

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