As in previous quarters, much of this funding went towards downstream companies. Out of US$326 million in venture capital funding, downstream companies attracted $205 million. Similarly, the IPO for SunEdison’s yieldco TerraForm Power represented over half of the $987 million in public markets financing.
However, these numbers are dwarfed by the capital that China continues to offer to its solar industry. During the quarter Chinese banks made $7.3 billion available in loans, credit lines and other forms of debt. This includes China Minsheng Bank’s $3.3 billion line of credit to Shunfeng, and developer Hareon accessing $3.2 billion between a loan and a credit line.
In China as in the West, much of this is going downstream, and Hareon plans to use this $3.2 billion for project development activities. It is unclear whether Shunfeng will direct its available capital towards its manufacturing, which includes subsidiary Wuxi Suntech, or towards project activity.
This shift is part of a multi-year trend. In 2011 Chinese banks made over $32 billion available to PV manufacturers, but this activity cooled and moved downstream in 2012 and 2013. In the beginning of 2014, the government ordered banks to step up their lending for project development, as part of policies intended to move the market from large-scale projects to distributed generation.
“China has shifted its own policy into installations after the market crashed,” Prabhu explained to PV Magazine. “They are pushing all financial institutions to lend.”
In terms of project-specific funding, there were 35 deals announced globally for projects over 1 MW during the quarter, totaling $3.7 billion. This was led by a $867 million syndicated loan for the 231 MW Setouchi Solar Project in Japan, which is being developed by an international consortium.
Other very large deals include the World Bank’s $519 million loan for the second phase of the Noor CSP project in Morocco, and Samsung raising $507 million in equity financing for its 100 MW Kingston Solar Project in Canada. In the distributed generation space, third party-residential and commercial solar funds declined sequentially in the third quarter to only $590 million.
During the quarter there were also 32 corporate mergers and acquisitions. The largest disclosed transaction was Solargise’s $200 million acquisition of Indian EPC GRAPP Energies. Additionally, Veritas Capital swooped up EMCORE’s space PV business, and Shunfeng bought Germany developer SAG Solarstrom for $86 million.