Lightsource bp to Scale Up with Full Ownership by bp

Lightsource bp to Scale Up with Full Ownership by bp

(IN BRIEF) bp is acquiring the remaining 50.03% stake in Lightsource bp, a leading utility-scale solar and battery storage developer and operator. This strategic move aims to enhance Lightsource bp’s growth and leverage bp’s complementary capabilities in finance and trading. It will also help bp meet its demand for low-carbon power and support its transition growth engines. The acquisition aligns with bp’s financial framework, and the transaction is expected to close in mid-2024, pending regulatory approvals. Joaquin Oliveira will become Co-CEO of Lightsource bp, and the acquisition includes potential additional payments based on performance. Lightsource bp will maintain its independent brand and organization following completion.

(PRESS RELEASE) LONDON, 30-Nov-2023 — /EuropaWire/ —  bp (LON: BP), a British multinational oil and gas company, is set to acquire the remaining 50.03% stake in Lightsource bp, a globally recognized developer and operator of utility-scale solar and battery storage assets. This move reflects a strategic decision to enhance Lightsource bp’s growth and performance under full ownership. Lightsource bp employs a proven capital-light business model, focusing on project development, engineering, construction, and divestment to create substantial value. This approach has consistently yielded equity returns in the mid-teens.

The acquisition will empower bp to further expand and leverage its complementary capabilities, including finance and trading, to maximize value within the renewable energy sector. bp’s objective is to maintain double-digit equity returns from this business and utilize Lightsource bp’s expertise to meet its growing demand for low-carbon power, supporting bp’s transition growth engines in hydrogen, EV charging, biofuels, and power trading.

Anja-Isabel Dotzenrath, bp’s Executive Vice President for Gas and Low-Carbon Energy, expressed optimism about strengthening Lightsource bp’s position as a leading global renewables developer and welcomed the opportunity for profitable growth and performance. “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.”

The acquisition is structured to be competitive and performance-driven, with the potential for future strategic partnerships. It aligns with bp’s financial framework and investment return expectations in renewables and power. Pending regulatory approvals, the transaction is anticipated to close in mid-2024.

Lightsource bp has achieved substantial growth since bp’s initial investment in 2017, expanding to 19 countries, developing a 61GW pipeline, and employing over 1,200 personnel. Following completion, Lightsource bp will maintain its independent brand and organization. Joaquin Oliveira, bp’s Senior Vice President of Finance for Gas & Low Carbon Energy, will become Co-CEO of Lightsource bp in early 2024, bringing his extensive commercial and leadership experience to the role.

Under the agreement, bp will acquire the remaining stake in Lightsource bp from the company’s founders, management, and staff, with a base equity value of £254 million for the 50.03% interest. Selling shareholders may also receive additional payments based on company performance and the market value of specific divested assets. Lightsource bp reported underlying EBITDA of £287 million for full-year 2022, with corporate-level debt adjusted for cash at £1.5 billion as of December 31, 2022, excluding project finance.

Cash payments at completion will be subject to standard transaction adjustments, company performance, market values, and acquired cash. Following completion, bp will consolidate Lightsource bp’s net debt, removing the existing $900 million guarantee issued by bp for Lightsource bp loans from bp’s reported adjusted debt. Further transaction details will be provided upon completion.