(Reuters) - BP (BP.L) will buy a 43 percent stake in solar energy company Lightsource for $200 million, the British oil producer said on Friday, marking its return to the solar sector.
The investment, a fraction of the approximately $17 billion BP has spent in 2017, comes six years after BP wrote down billions on its first foray into solar, when its panel manufacturing business struggled with competition from China.
“We’re excited to be coming back to solar, but in a new and very different way,” Chief Executive Bob Dudley said.
London-based Lightsource, to be renamed Lightsource BP, will target the growing demand for large-scale solar projects. The company has a 6 gigawatt (GW) growth pipeline largely focused on the United States, India, Europe and the Middle East, BP said.
Lightsource has commissioned 1.3 GW of solar capacity to date and manages about 2 GW of capacity under long-term operations and maintenance contracts.
BP will pay $50 million when the deal is completed, with the balance paid in installments over three years, it said.
Two decades ago, BP had set out to transcend oil, adopting a sunburst logo to convey its plans to pour $8 billion over a decade into renewable technologies, even promising to power its gas stations with the sun.
That transformation - marketed as “Beyond Petroleum” - led to BP manufacturing solar panels in Australia, Spain and the United States and erecting wind farms in the United States and the Netherlands.
BP, which will have two seats on Lightsource board, expects the deal to be completed in early 2018. Lightsource were advised by Rothschild, White and Case, Deloitte and Baker & McKenzie.
Other oil majors including Royal Dutch Shell (RDSa.L) and France’s Total (TOTF.PA) have invested in renewable energy as they prepare for a shift away from fossil fuels in the fight against climate change.
Reporting by Arathy S Nair in Bengaluru; editing by Amrutha Gayathri and Jason Neely
