British oil giant BP has agreed to acquire the 50.03% stake it doesn't already own in Lightsource BP, a solar power developer and a co-sponsor of India-focused climate investment firm Eversource Capital, as it seeks to ramp up its renewable energy capacity.
BP said Thursday it will acquire the stake from London-based Lightsource BP’s founders, management, and staff at a base equity value of 254 million pounds (about $322 million).
The selling shareholders will have the opportunity to receive additional payment over time, dependent on company performance and the market value of pre-agreed assets divested from the portfolio, BP said.
BP said full ownership will enable it to scale up Lightsource BP and create additional value by applying its capabilities and strengths. It noted that Lightsource BP has built a track record of delivering renewables projects with equity returns in the mid-teens and said it will continue to target double-digit equity returns from this 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 executive vice president for gas and low-carbon energy.
In addition, BP intends to use Lightsource BP’s capabilities as a developer of cost-competitive utility-scale onshore renewable power to help meet its own demand for low carbon power. This will also underpin delivery of BP’s targets for its transition growth engines in hydrogen, EV charging and biofuels as well as in power trading, the company said.
BP expects the transaction to close in mid-2024.
Lightsource BP was set up in 2010. BP first acquired a stake in the solar power developer in 2017. Since then, Lightsource has expanded from operating in three countries to 19, built a 61GW development pipeline, and grown to over 1,200 personnel.
In 2018, Lightsource BP teamed up with Singapore-based and India-focused private equity firm Everstone to create Eversource Capital.
Mumbai- and London-based Eversource marked the final close of its debut climate impact fund, Green Growth Equity Fund (GGEF), at $741 million in January 2022. This was the largest single-country fund focused on climate change, mitigation and adaptation in emerging markets. Eversource is considering launching its second fund and could target a bigger corpus than what it raised in its maiden outing, VCCircle reported earlier this year.
The GGEF has made seven investments so far. Its investments include Ayana Renewable Power, a platform to develop and operate utility-scale renewable power projects; Radiance Renewables, a developer of renewable energy solutions for commercial, industrial and residential customers; and GreenCell Mobility, a shared electric mobility player.
Besides, the fund has invested in waste management platform EverEnviro, EV operator Lithium and climate-focused lender Ecofy.
