bp, a global energy company, has reached an agreement to acquire the remaining 50.03% stake it doesn't already own in Lightsource bp, a prominent developer and operator of utility-scale solar and battery storage assets. The move aligns with bp's commitment to renewables and strategic focus on low-carbon energy solutions. Lightsource bp has established itself as a key player with a proven capital-light business model, emphasizing development, engineering, construction, and strategic partnerships.

The acquisition allows bp to take full control of Lightsource bp at a time deemed optimal for the company's growth and performance. Lightsource bp has excelled in delivering renewable projects with equity returns in the mid-teens, employing a model that involves selling majority interests in developed assets to strategic partners.

bp's ownership will facilitate the scaling up of Lightsource bp, leveraging bp's complementary capabilities in finance and trading. The aim is to target double-digit equity returns from this business while contributing to bp's transition growth engines, including hydrogen, electric vehicle (EV) charging, biofuels, and power trading.

Anja-Isabel Dotzenrath, bp's Executive Vice President for Gas and Low-Carbon Energy, expressed confidence in the partnership's evolution, emphasizing the potential for profitable growth and performance. The acquisition is expected to align with bp's financial framework and deliver returns in renewables and power.

Lightsource bp has experienced significant growth since bp's initial stake in 2017, expanding to operate in 19 countries, building a 61GW development pipeline, and employing over 1,200 personnel. Post-acquisition, Lightsource bp will maintain its independent brand and organization, with Joaquin Oliveira, bp's Senior Vice President for Finance for Gas & Low Carbon Energy, taking on the role of Co-CEO of Lightsource bp.

The transaction is subject to regulatory approvals and is anticipated to close in mid-2024. The agreed base equity value for the 50.03% interest is £254 million, with additional payments contingent on company performance and the market value of specified divested assets from the portfolio. Lightsource bp reported underlying EBITDA of £287 million for 2022, with corporate-level debt adjusted for cash at £1.5 billion at the effective transaction date of December 31, 2022.