British oil and gas giant BP has agreed to buy the remaining 50.03% stake in solar energy joint venture (JV) Lightsource bp for £254m.
The JV uses a capital-light “develop, engineer, construct and farm down” business model that creates value through selling a majority interest in assets it has developed for its partners.
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Through full ownership, bp intends to further scale up Lightsource bp and bring additional value through its complementary capabilities such as finance and trading.
The company will continue to aim for double-digit equity returns from Lightsource bp.
It also plans to leverage Lightsource bp’s capabilities to develop cost-competitive renewable power to help meet its own demand for low-carbon power.
By integrating the company, it can strengthen and de-risk the delivery of its own target of transition towards hydrogen, electric vehicle charging, biofuels and power trading.
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By GlobalDatabp gas and low-carbon energy executive vice-president Anja-Isabel Dotzenrath stated: “This is a natural evolution of the partnership we have built over the past six years – now we will be able to take Lightsource bp to the next level of profitable growth and performance. We will continue to scale this successful business, and also apply its capabilities and expertise to help meet bp’s growing demand for low-carbon power from our transition growth engines.
“I look forward to welcoming the Lightsource bp team to bp and am confident that together we can further strengthen its position as a leading global renewables developer.”
Shareholders of Lightsource bp can expect further payment over time, depending upon the company’s performance and market value.
The oil and gas company acquired a 43% stake in Lightsource bp in 2017 by investing $200m (£158.07m). The JV has delivered significant growth since then.
It has expanded its operations from three to 19 countries and has built a 61GW development pipeline with a workforce of more than 1,200.
In December 2019, bp and Lightsource bp agreed to equalise their interest in Lightsource bp, to create a simplified 50:50 JV structure. bp agreed to purchase equity in the business as part of this arrangement.
For the full year 2022, Lightsource bp’s underlying earnings before interest, taxes, depreciation and amortisation stood at £287m and its corporate-level debt adjusted for cash excluding project finance was £1.5bn.
bp finance for gas and low carbon energy senior vice-president Joaquin Oliveira will take up the role of Lightsource bp co-CEO early in 2024.
