BP Buys Remaining Lightsource Stake for $320 Million

BP has agreed to take full ownership of solar company Lightsource BP by acquiring the company’s 50.03% remaining interest, according to a Nov. 30 press release.

Under the agreement, BP will acquire the remaining stake in Lightsource from the company’s founders, management and staff. The parties agreed on a base equity value of £254 million (US$321 million) for the 50.03% interest, according to the release.

For full-year 2022, Lightsource BP reported underlying EBITDA of £287 million (US$ 362.9 million). On the transaction’s effective date of Dec. 31, 2022, the company had corporate level debt adjusted for cash of £1.5 billion (US$1.9 billion), excluding project finance. The transaction is anticipated to close mid-2024.

As part of the deal, BP will consolidate Lightsource BP’s net debt and an existing $900 million loan guarantee issued by BP related to Lightsource BP will be removed from BP’s reported adjusted debt.

BP said it structured and priced the acquisition terms to be “highly competitive,” reflecting market conditions and with a consideration structure that is “biased to performance.” In time, BP may also look to unlock further value  by bringing a strategic partner into the business.

“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,” said Anja-Isabel Dotzenrath, BP’s executive vice president for gas and low carbon energy.

BP added that integration is expected to underpin and de-risk delivery of company targets for its energy transition growth initiatives in hydrogen, EV charging, biofuels and power trading.

Lightsource BP operates a “capital-light, develop, engineer, construct and farm down business model” that creates value through selling majority interests in assets it has developed to strategic partners. The model has “built a track record of delivering renewables projects with equity returns in the mid-teens.”

BP said full ownership will enable the company to further scale up Lightsource BP and create additional value by applying complementary capabilities and strengths—including in finance and trading—to the business. BP will continue to target double-digit equity returns from the business.

Following the deal’s completion, BP intends to maintain Lightsource’s independent brand and organization. In early 2024, Joaquin Oliveira, who now serves as BP’s senior vice president of finance for gas and low carbon energy, will take on the role of co-CEO of Lightsource. Oliveira has been a non-executive director of Lightsource BP for more than two years.

“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,” Dotzenrath said.