BENGALURU: BP 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 US, 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 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 $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 completed in early 2018. Lightsource was advised by Rothschild, White and Case, Deloitte and Baker & McKenzie.
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.
— REUTERS
BP to return to solar market with 43% stake in Lightsource
BP to return to solar market with 43% stake in Lightsource
Kuwait PMI climbs to 54.5; Egypt falls to 48.9 in February: S&P Global
RIYADH: Kuwait’s non-oil private sector continued to expand in February, supported by growth in output and new orders, while business conditions in Egypt weakened, an economy tracker showed.
According to the latest Purchasing Managers’ Index surveys released by S&P Global, Kuwait’s PMI rose to 54.5 in February from 53 in January, extending the current run of improving business conditions to a year and a half.
The expansion in Kuwait’s non-oil sector aligns with a broader trend across the Gulf Cooperation Council region, where countries are pursuing diversification strategies to reduce reliance on crude revenues.
The surveys were conducted before regional tensions escalated following US and Israeli strikes on Iran and Tehran’s retaliatory attacks across the Gulf, which have since disrupted markets and energy trade.
Commenting on the February survey, Andrew Harker, economics director at S&P Global Market Intelligence, said: “Growth momentum strengthened in Kuwait’s non-oil private sector in February as companies were again successful in securing new business.”
According to the report, key factors supporting expansions in new orders and business activity included the provision of good-quality products at competitive prices and successful marketing efforts.
The rate of job creation was modest in February and unchanged from January.
Firms continued hiring staff for advertising and project-related work, resulting in a twelfth consecutive monthly increase in employment.
“The main issue facing firms at present is being able to grow workforce numbers quickly enough to keep up with workloads,” said Harker.
He added: “With backlogs rising at a fresh record pace for three months in a row now, fulfilling customer requirements in a timely manner is becoming more difficult, although companies did expand their purchasing activity at a near-record pace in February to help make sure the necessary materials are available going forward.”
Overall input cost inflation hit a nine-month high in February, with both purchase prices and staff costs rising at faster rates compared to January.
The report added that some companies increased their selling prices in response to higher input costs.
Regarding the outlook, companies expressed optimism, with sentiment reaching a 26-month high in February, driven by product variety, competitive pricing and good-quality customer service.
Egypt’s non-oil sector contracts
Egypt’s non-oil private sector contracted in February, driven by rising costs and softer demand, according to S&P Global.
The country’s PMI fell to 48.9 in February from 49.8 in January.
Although the reading remained below the 50 neutral threshold, it was still above its long-run average of 48.3, the report said.
Output declined for the first time in four months in February, and all five sub-components of the PMI indicated weaker business conditions compared to January.
“The February PMI data pointed to a slowdown in the Egyptian non-oil private sector as activity curtailed and new order volumes weakened,” said David Owen, senior economist at S&P Global Market Intelligence.
That said, he added that the dip followed an unusually strong run in business performance, and that the latest figures are consistent with annual GDP growth of approximately 4.5 percent.
Egyptian non-oil companies also reported a decline in order book volumes during the month.
Sales fell across manufacturing, wholesale and retail, and services, while construction was the only monitored sector where new orders improved.
Employment fell for the third consecutive month in February, though at a slower rate, as companies continued active job cuttings and hiring freezes.
The report revealed that cost pressures accelerated across the month, driven by rising global commodity prices, particularly oil and metals.
Selling prices, however, were up only fractionally, with just a small proportion of firms choosing to pass cost increases onto their customers.
“Egyptian non-oil companies were notably exposed to the uplift in global commodity prices, with firms emphasising the impact of higher prices for oil and metals, resulting in the sharpest increase in business costs for nine months and hitting margins at a time when firms are reluctant to raise their selling prices,” said Owen.
He concluded: “Firms will therefore be keen to see commodity markets settle, especially as recent periods of high input cost inflation have typically constrained business output.”
