With full ownership, BP now aims to expand Lightsource BP’s operations further and maintains its goal of achieving double-digit equity returns from this venture.
In their recent agreement, British Petroleum (BP) is set to acquire the remaining 50.03% stake in Lightsource BP, a solar development firm, from its founders, management, and staff. The agreed base equity value for this stake is £254 million.
The sellers are eligible for future payments depending on the company’s performance and the market value of certain assets that are to be divested from the portfolio. For the full year of 2022, Lightsource BP reported an underlying EBITDA (Earnings before interest, taxes, depreciation, and amortization) of £287 million.
As of 31 December 2022, the effective date of the transaction, Lightsource BP’s corporate level debt, adjusted for cash and excluding project finance, stood at £1.5 billion. Upon completion, BP will incorporate Lightsource BP’s net debt into its finances, and the existing $900 million guarantee issued by BP for Lightsource BP loans will be removed from BP’s reported adjusted debt.
Following the completion of the acquisition, BP plans to retain Lightsource BP’s distinct brand and independent organizational structure. In early 2024, Joaquin Oliveira, currently serving as BP’s Senior Vice President, Finance for Gas & Low Carbon Energy, will be seconded to Lightsource BP to assume the role of Co-CEO. Oliveira, who brings extensive commercial and leadership expertise, has also been involved with Lightsource bp as a non-executive director for over two years.
BP plans to utilize Lightsource BP’s expertise as a developer of cost-effective utility-scale onshore renewable power to meet its own low carbon power needs. This integration is expected to support and mitigate risks in achieving BP’s ambitious goals in its transition growth areas, including hydrogen, electric vehicle charging, biofuels, and power trading.
Since BP initially invested in Lightsource bp in 2017, the company has experienced considerable growth. Its operations have expanded from three to 19 countries, it has developed a 61GW project pipeline, and its workforce has increased to over 1,200 employees.