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BP Secures $380M Financial Package for 2 Solar Projects

Lightsource bp — of which BP plc BP owns 50% — recently announced that it has secured a financing package and commenced construction of two solar projects located around 40 miles south of Dallas, TX. The projects, namely Elm Branch and Briar Creek, received financing from multiple sources.

While Bank of America Corporation BAC provided tax equity financing, ING Capital and Societe Generale provided a construction debt. The fact that BP has secured the $380-million financial package reflects the company’s ability to draw capital for value projects. This is even more pertinent as the global energy sector is under tremendous pressure due to the coronavirus pandemic.

Moreover, the move shows the growing interest of financial institutions in renewable sources. This comes at a time when S&P Global Ratings has put multiple big oil companies like Royal Dutch Shell plc RDS.A, Chevron Corporation CVX and others on negative watch. Several energy majors — including BP — are currently pursuing many green energy projects, after receiving pressure from investors. Importantly, BP is boosting capital spending on the renewable power business under the leadership of its CEO Bernard Looney.

Lightsource bp was formed in 2018, with the combined expertise of Lightsource Renewable Energy and BP. Notably, the two solar projects are expected to come online by late 2021. The Elm Branch project will likely have a 163-megawatt (MW) production capacity. Briar Creek, on the contrary, is expected to be a 153-MW solar plant.

These two facilities will likely reduce 370,000 metric tons of carbon dioxide production per annum. Moreover, the projects are supported by contracts with Allianz and L3Harris. In the construction phase, the projects will create more than 500 jobs in the locality.

Price Performance & Zacks Rank

BP’s shares have gained 54.6% in the past three months compared with 48% rise of the industry it belongs to. It currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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