Bloom Energy and SK ecoplant to expand hydrogen power partnership
US-headed fuel cell technology developer Bloom Energy Corporation (Bloom Energy) and SK ecoplant, an affiliate of South Korean conglomerate SK Group, have announced the companies are expanding their existing partnership to fortify their market leadership in power generation and to establish market leadership in the hydrogen economy.
Since the start of their strategic partnership three years ago, Bloom Energy and SK ecoplant have transacted nearly 200 MW of projects together totaling more than US$1.8 billion of equipment and expected service revenue.
Over the next three years, the companies will expand this existing business with contracts for at least an additional 500 MW of power between 2022 and 2025, representing approximately US$4.5 billion in equipment and future service revenue.
Bloom Energy is SK ecoplant’s largest strategic partner in clean energy. We have seen the unparalleled performance of Bloom Energy’s product over the past three years and the company’s ability to execute and deliver a superior solution. We have also had firsthand experience with Bloom’s new hydrogen fuel cells and highly efficient electrolyzers, and we are excited about the competitive advantage we will have, said Kyung-II Park, CEO, SK ecoplant.
Establish two Hydrogen Innovation Centers
Bloom Energy and SK ecoplant agreed to create Hydrogen Innovation Centers in the United States and South Korea. The intent is to significantly accelerate the global market expansion for Bloom Energy’s hydrogen fuel cell and hydrogen electrolyzer products.
The agreement also reflects both Bloom Energy and SK ecoplant’s enhanced commitment to a zero-carbon future and the further implementation of environmental, social, and governance (ESG) practices.
In addition, Bloom Energy and SK ecoplant agreed to strengthen their strategic alliance through expanding business cooperation in global markets, which may include exclusive distribution rights in select new markets.
From the start of our relationship with SK ecoplant, we have recognized that working together will accelerate our growth and enable SK to become a leader in clean energy and infrastructure solutions, said KR Sridhar, Founder, Chairman, and CEO, Bloom Energy.
SK ecoplant to invest approximately US$500 million in Bloom Energy
SK ecoplant will invest US$255 million in Bloom Energy by acquiring 10 million shares of zero-coupon, non-voting redeemable convertible preferred stock at a price of US$25.50 per share.
SK ecoplant has the option to acquire a minimum of an additional 11 million shares of Class A common stock at a 15 percent premium to the prevailing stock price at the time, which must be no later than November 30, 2023, and is subject to maximum ownership of 15 percent.
Our work together has established a shared commitment to sustainability, innovation, and creating value. We are demonstrating our confidence and furthering our commitment to this partnership by making this financial investment, said Kyung-II Park.
Upon completion of SK ecoplant’s purchase of its second tranche, SK ecoplant will add a member to the Bloom Energy Board of Directors. SK will give an irrevocable proxy to vote its shares to Bloom Energy. Centerview Partners LLC is serving as a financial advisor to Bloom Energy.
Bloom Energy intends to use the proceeds for market growth, rapid commercialization of hydrogen solutions, and for general corporate purposes. The investment is subject to customary closing conditions and regulatory approvals and is expected to close within 45 days.
I am thrilled that over the past three years the superior performance of our products, execution capability and the scale of our operations have led to such a strong relationship with SK ecoplant. SK ecoplant’s confidence to invest in us is a clear validation of our products and our people. Together, we can accelerate the hydrogen economy on a global basis. This is a win, win, win, win for our company, partners, customers, and investors, ended KR Sridhar.