Investments in Indian Solar Sector Declined 66% YoY to $970 Million in Q1 Amid COVID-19

The investments in Q1 were the lowest in two years


Investments in the Indian solar industry totaled $970 million (~₹72.9 billion) in the first quarter (Q1) of 2020, according to Mercom’s Q1 2020 India Solar Market Update. Investments were 66% lower year-over-year (YoY) compared to $2.8 billion (~₹195.4 billion) recorded in Q1 2019.

The decline was primarily due to the slowdown in solar installations during the quarter and a lack of new investments into manufacturing units. According to the report, COVID-19 disrupted the solar supply chain and India’s solar growth as solar installations fell to 1.1 GW, a 39% decline YoY. At the end of Q1 2020, India’s installed solar capacity stood at ~36.8 GW.

Investments in Q1 were the lowest in a quarter recorded over two years.

According to the global Q1 2020 Funding and M&A Report from Mercom Capital, corporate funding into the global solar sector was also down in Q1 with $1.9 billion, which was 31% lower YoY.

Investments in Indian Solar Sector by Quarter ($ Billion)

Deal Highlights

A major funding deal in the quarter was $450 million (~₹31.96 billion) raised by ReNew Power through a dollar bond issue. The bonds were priced at a coupon rate of 5.875% and will be issued in two tranches with an average maturity of five-and-a-half years. ReNew Power intends to use the proceeds from the dollar notes to refinance existing borrowings, including trade credit facilities of the holding company. The company added that part of the proceeds of nearly $65 million (~₹4.61 billion) would be used to meet future capital expenditure requirements.

Fourth Partner Energy, a distributed solar energy management company, received a loan of ₹5 million (~$0.067 million), from Grameen Impact India (GIII), a non-banking finance corporation registered under the Reserve Bank of India (RBI), towards its Power@1 Program for 18 months. Through the Power@1 Program, Fourth Partner Energy aims to provide electricity to non-profit organizations like government schools, rural hospitals, and others.

The quarter also saw venture funding deals, corporate, and project acquisitions.

Complete funding and M&A transaction list and details can be found in Mercom’s Q1 2020 Solar Funding and M&A Report.

Join our upcoming webinar ‘India Solar Market Overview and Outlook’ on June 5, 2020, at 11 am (IST). Our guest speakers will bring an investor’s perspective to the discussion and talk about the current financing environment, what it takes to lend to solar projects, and other important issues facing the market.