Cleantech Investor

Published in: 2011 - A Review of Cleantech Equity Deals, January 2012

Under the shadow cast by the Fukushima nuclear accident early in the year, consolidation gathered pace in the utility sector in 2011. With stock markets at depressed levels, in Europe Iberdrola and EDF each acquired their respective listed renewable energy subsidiaries – and the cash-strapped Portuguese Government sold a stake in EDP to China Three Gorges. In the US, although not strictly renewable, energy deals announced included the US$16.2 billion plan to acquire Progress Energy (PGN) by Duke Energy Corp (DUK). That deal failed to gain approval before the end of 2011, but others were approved by the regulators – significantly, sometimes in exchange for commitments to invest in renewable energy. This was the case in the US$8.05 billion takeover by Exelon Corp (EXC) of Constellation Energy Group Inc. (CEG), which agreed to develop 180MW of wind and solar generating capacity.

Meanwhile, niche stock market quoted renewable energy generators, lacking support from institutional investors, were forced into alternative funding deals. The acquisition of a majority stake in Brazil’s Renova Energia by Light, and the sale of the US offshore SeaEnergy Renewables unit to Spanish oil company Repsol are cases in point.

Private equity investors also homed in on the solar market in 2011, with Terra Firma setting a record price for an acquisition of Italian solar assets and KKR investing alongside Google in a California PV project.

2011 was a “blockbuster year for debt funding” in the wind industry, which amounted to US$11 billion compared to US$1.8 billion in 2010, according to figures from the Mercom Capital Group. This surge in lending was accounted for in large part by a US$5 billion credit facility from the China Development Bank (CDB) to Ming Yang (which has a partnership with Three Gorges New Energy for offshore wind), for development outside of China. China’s Goldwind Science & Technology also received US$1.6 billion in credit. One of the first western developers to receive non recourse lending from the CDB was Mainstream Renewable Power, for a project in Chile using Goldwind turbines. Two other notable debt deals were a US$1.9 billion credit facility for Vestas from lenders including Commerzbank and DnB NOR Bank; and a US$1.7 billion syndicated loan received by Gamesa.

There was also extensive activity in terms of equity transactions for project developers, both for project finance and in mergers and acquisitions. China, India and Brazil were amongst the most active markets for wind energy, but European markets were also active. While Google is focusing on solar, a notable non utility player in the wind market was Ikea Group, which acquired a wind farm in Scotland, building upon its renewable portfolio elsewhere in Europe.

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SUBSCRIBE NOW to Cleantech magazine for one year and receive your FREE copy of 'Renewables - A Practical Handbook'

Consulting Editors, Matt Bonass and Michael Rudd; featuring a preface by Governor Gray Davis, 37^th governor of California; published by Globe Law and Business.

by Anne McIvor

‘Renewables – A Practical Handbook’ is the impressive result of a project steered by MattBonass and Michael Rudd. When Matt invited me to review the fruits of their labours, I must admit that my heart sank, just a little. Both Matt and Michael are lawyers, so I expected a legal text book. But  I agreed to read it and – thankfully – I was in for a very pleasant surprise.

This is a genuinely fascinating read for anyone involved in – or considering entering into – the clean technology and renewable energy industries, either as an operator, investor or advisor. Chapters which do focus on legal issues avoid legal jargon and are easy to read. There is extensive coverage of financing and structuring issues which, combined with the legal context, contributes to making this a truly ‘practical handbook’ for the renewables industry.

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First published in Cleantech Infocus: 2010 - Equity Deals of the Year, January 2011. Copyright Cleantech Investor Ltd

Renewable energy generators were successful at raising funding in emerging markets during 2010. China saw IPOs on the Hong Kong Stock Exchange by China Datang Corp. Renewable Power Co. (the country’s second largest wind power producer) and China Suntien Green Energy Corporation (which focuses on northern China and develops wind and natural gas generation). India’s Caparo Energy listed on the London Stock Exchange’s AIM market, while India’s Orient Green Power Co. saw its shares list in Mumbai.

In Sao Paulo, Renova Energia, which generates energy from wind and mini hydro, also raised funding. Meanwhile, Europe saw a high profile deal with the listing of Enel Green Energy in Italy.

However, a number of planned renewable energy IPOs were cancelled or postponed during the year due to the difficult market conditions. The US saw the shelving of the planned IPO of First Wind Holdings of Boston. In Europe, Renovalia Energy of Spain, which operates solar and wind power plants, postponed its planned IPO. And even China wasn’t immune from the difficult environment. Huaneng Renewables, a unit of China Huaneng Group Corp., was forced to scrap its planned IPO on the Hong Kong stock exchange. 

First published in Cleantech magazine, May/June 2009. Copyright Cleantech Investor 2009.

The British Wind Energy Association (BWEA) took wave and tidal energies into its remit in 2005 and reports that one third of its 470 members are already involved in wave and tidal energies. This change in the dynamics of the organisation has sparked off a debate about the need for a rebranding to include marine renewables. Can we expect to see a change in the name later this year? Watch this space!