BP will buy a 43 per cent stake in solar energy company Lightsource for US$200 million (S$269 million), the British oil producer said yesterday, marking its return to the solar sector.
The investment, a fraction of the approximately US$17 billion BP has spent this year, 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," said chief executive Bob Dudley.
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 1.3GW of solar capacity to date and manages about 2GW of capacity under long-term operations and maintenance contracts.
BP will pay US$50 million when the deal is completed, with the balance paid in instalments 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 US$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 US, and erecting wind farms in the US and the Netherlands.
BP, which will have two seats on the Lightsource board, expects the deal to be done early next year.
Other oil majors including Royal Dutch Shell and France's Total have invested in renewable energy as they prepare for a shift away from fossil fuels in the fight against climate change.