The World's #1 Renewable Energy Network for News, Information, and Companies.

“Unusually High” Wind Sector Funding Focuses on India

Venture capital funding in the wind sector was unusually high in the second quarter of this year, according to Mercom Capital’s quarterly wind funding and M&A report, with US $195 million going to two companies in India. Both companies are project developers, said Raj Prabhu, Mercom’s CEO.

According to the report, wind sector venture capital funding totaled $210 million in four deals in Q2 2013, compared to $16 million in three deals in Q1. Total wind sector funding was $3.5 billion in Q2, including VC funding, debt financing and announced project funding deals.

Prabhu attributed the report's high numbers to “opportunistic investment” – investors taking advantage of favourable policy conditions. Wind investment is still largely policy-dependent, Prabhu confirmed; in regions where tariffs are healthy there will be more money coming in. “Nobody wanted to touch India for a while after the Generation Based Incentive (GBI) stopped,” he said. Cancellation of the incentive had caused a drop of 1500 MW in wind power production in 2012-13, according to the Indian Wind Energy Association – but "as soon as the government announced it had approved it again, all of a sudden projects became attractive, and developers became attractive to investors," Prabhu said.

What Prabhu finds interesting is that a very large investor, Goldman Sachs, was involved in Indian wind developer ReNew Power’s raising of $135 million. “Big investors are basically just looking at where the opportunities lie right now,” he said. “It’s a fragmented industry, especially in India where investors are putting money into these companies and will probably acquire smaller developers and projects and get them to where they can take advantage of size and scale. We’re seeing very specific strategies like this, but it’s also very interesting that this amount of money has gone into wind.”

Wind tends to attract relatively little private equity funding because it’s such a mature industry, Prabhu explained. “Unlike solar, there aren’t a lot of startups with new technologies getting funded; most of the technology development at this stage is big developers doing it in-house,” he said. But technology funding does happen, he said, such as Q2’s ca. $6.2 million raised by ROMO Wind – indicating that “innovation is still happening.”

Mercom has also seen a shift in investor confidence in the wind sector, with significant growth in investment from funds that look for steady, dependable returns; as the sector matures, wind is increasingly seen as a comfortable and safe long-term investment. “The risk factor we used to see in the past with renewable energy, especially wind, has kind of gone away,” Prabhu said. “Investors are now so comfortable with the technology and economics that they’re willing to wheel and deal in these big projects.”

Among the large investors in the wind sector, Mercom has seen general funds, infrastructure funds, insurance companies and pension funds. Of these, Prabhu pointed to pension funds’ investment in wind and solar as an endorsement for the sector: “Pension funds don’t take much risk,” he said; “they think this is risk-free, mainstream investment.”

The largest group acquiring projects in Q2 were investment funds, followed by project developers and independent power producers (IPPs). “These funds are financial institutions buying these assets basically for returns, not another wind company buying a project from a peer. So that says a lot as to how far wind has come investment-wise,” Prabhu said. “It’s pretty close to being mainstream. And it's also a pretty good sign when utilities start acquiring projects."

In addition to VC funding, Q2 featured the highest number of project acquisitions since Mercom began tracking the wind sector, with 36 deals totaling almost $2.1 billion. The previous record quarter for project acquisitions was 24 deals in 2011, Prabhu said. There have been 53 project acquisitions so far this year, compared to 72 in the whole of 2012.

“Looking at some of the largest deals in terms of dollars,” he said, “there was the [U.S.] Puget Sound energy project from PG&E at almost half a billion. In terms of megawatts the largest was almost 400 MW. These are not small deals – these are huge.”

Looking forward, investors are watching various markets for policy changes. “There are markets where new wind installations are outpacing any other forms of energy, even conventional energy,” Prabhu said. But, he cautioned, “in India, with the elections coming up, investors will want to see when the GBI will actually be approved. In the U.S. they'll want to see how the Production Tax Credit develops, and they’re watching what happens in China.”  

Lead image: windmills at Thar desert in Rajasthan, India via Shutterstock


Renewable energy jobs

Global Renewable Energy Employment Surges 18 Percent to 7.7 Million

Andrew Burger, Correspondent Ongoing growth in renewable energy investment and deployment is creating jobs worldwide — and lots of them. This job growth is helping governments address a fundamental economic problem plaguing developed and developing cou...
GE Digital Wind Farm

GE Introduces Digital Wind Farm that Could Boost Production 20 Percent, Re-ignites Alstom Buyout Talk

Meg Cichon, Associate Editor General Electric (GE) is pushing its wind farms to join the big data revolution with its new Digital Wind Farm, announced this week at Windpower 2015 in Orlando, Fla. amidst talk that its $15 billion offer to buy Alstom’s p...
Wind turbine

Bigger Wind Turbine Towers = Bigger US Development Opportunity

Meg Cichon, Associate Editor Wind energy already accounts for about 5 percent of U.S. electricity generation, which crowned the nation as the global leader in wind production late last year. There is now more than 65 gigawatts (GW) of capacit...
Wind turbines

Wind Energy Is Crucial in the Fight Against Climate Change, Says US Energy Secretary

Meg Cichon, Associate Editor

The opening general session at Windpower 2015 marked the first appearance by an U.S. energy secretary at the show, “which is surprising,” said current energy secretary Ernest Moniz, “but better late than never.”

Tildy Bayar is a journalist focusing on the energy sector. She is a former Associate Editor on and Renewable Energy World magazine.


Volume 18, Issue 3


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @megcichon @jennrunyon



Doing Business in Brazil – in partnership with GWEC, the Global Win...

Brazil is one of the most promising markets for wind energy.  Ranke...

Energy Storage USA 2015

Energy Storage USA is the leading conference in the United States focuse...

Wind Power Central America

Wind power projects are expected to reach 46GW of total installed capaci...


SunEdison Expands Residential Market Offerings with New PPA, Sales ...

SunEdison has largely focussed on the commercial and utility-scale solar...

Deadline for Inclusion in Solar Power World's Top Solar Contractors...

UPDATE: The official deadline for the Solar Power World T...

Are You Ready for a Natural Disaster?

Guest post by Jenna Clarke  Living in the Shenandoah Valley of Virg...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now