bp expands renewable energy portfolio with 100% ownership of Lightsource bp
In a significant development in the renewable energy sector, bp has agreed to acquire the 50.03% interest in Lightsource bp that it does not already own. This move positions bp to fully harness the capabilities of one of the world’s leading developers and operators of utility-scale solar and battery storage assets.
The Strategic Importance of Full Ownership for bp
The acquisition comes at a crucial time, enabling Lightsource bp’s continuing growth and high performance. With full ownership, bp aims to scale up Lightsource bp and apply its complementary strengths in finance and trading to the business. This integration is in line with bp’s strategy to target double-digit equity returns and further its low carbon power ambitions.
Lightsource bp’s Capital-Light Business Model
Lightsource bp operates with a capital-light model, developing, engineering, constructing, and then farming down assets to strategic partners. This approach has enabled the company to deliver renewable projects with equity returns in the mid-teens. The acquisition will see bp integrating these capabilities to meet its demand for low carbon power, supporting its transition growth engines in hydrogen, EV charging, biofuels, and power trading.
Financial Details and Future Plans
The acquisition is structured to reflect market conditions with a performance-biased consideration structure. bp has priced the transaction competitively, with a base equity value of £254 million for the 50.03% interest. Lightsource bp reported underlying EBITDA of £287 million for the full year 2022, with corporate level debt, adjusted for cash, of £1.5 billion. The transaction, subject to regulatory approvals, is anticipated to close in mid-2024.
Lightsource bp’s Evolution and bp’s Integration Plan
Since bp first took a stake in Lightsource bp in 2017, the company has seen significant growth, expanding to 19 countries and growing its development pipeline to 61GW. Post-acquisition, bp plans to maintain Lightsource bp’s independent brand and organization. Joaquin Oliveira, currently bp’s senior vice president, will be seconded as Co-CEO of Lightsource bp.
Anja-Isabel Dotzenrath’s Statement on the Acquisition
Anja-Isabel Dotzenrath, bp’s executive vice president for gas and low-carbon energy, expressed enthusiasm about the acquisition, stating that it represents a natural evolution of their six-year partnership and will take Lightsource bp to a new level of profitable growth and performance.