Bloomberg New Energy Finance

Healthy appetite for assets

Rohan Boyle, 12 Mar 13
Given their relatively stable, regulated returns, demand for renewable power assets is growing amid continued economic uncertainty. The level of interest of potential acquirers in buying equipment manufacturers, on the other hand, remains low.

The value of mergers and acquisitions in the clean energy sector returned to near its long-term average in the final three months of 2012 after a period of weakness in the second and third quarters. Some USD 13.8 billion changed hands, according to Bloomberg New Energy Finance data, slightly less than the average over the last three years of USD 15.5 billion, but a significant increase on the USD 8.3 billion recorded in the previous quarter.

Despite this seemingly healthy flush of interest in the sector, there is still considerable weakness in the market. The number of deals, for instance, remained low. There were 82 transactions – including asset acquisitions, corporate equity purchases, private equity buy-outs and public equity investor exits – which was exactly the same number chalked up in the preceding three months, and five fewer than the tally in the fourth quarter of 2011.

Also of concern is the major imbalance between the recent healthy-looking trade in renewable power-generating assets and the much-diminished market for clean energy corporate equity acquisitions. The former ballooned to USD 12.3 billion in the fourth quarter, just short of the record set in the second quarter of 2009, while the latter contracted to just USD 1.3 billion, its lowest quarterly level since the third quarter of 2004.

This is an abridged version of the interview – the full text is available in new energy issue 02/2013

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