Bloom Energy (a leading energy company) and SK Ecoplant (an affiliate of South Korean conglomerate SK Group) announced to expand their existing alliance to strengthen their position in the hydrogen and power generation markets.
Under the agreement, SK Ecoplant will buy a minimum of 500 MW of power from Bloom Energy representing a $4.5 billion revenue commitment. Both partners will also jointly develop two hydrogen innovation centres and target around $500 million equity investment.
Bloom Energy and SK Ecoplant agreed to create Hydrogen Innovation Centres in the US and South Korea to accelerate Bloom Energy’s hydrogen fuel cell and electrolyser products’ global market expansion.
SK Ecoplant will invest $255 million in Bloom Energy by acquiring 10 million shares of zero coupons, non-voting redeemable convertible preferred stock at $25.50/share. SK Ecoplant has the option to purchase a minimum of an additional 11 million shares of Class A common stock at a 15% premium to the prevailing stock price at the time, no later than November 2023 and is subject to up to 15% ownership. The investment is subject to conditions and regulatory approvals and is expected to close within 45 days.
Since the start of their strategic partnership three years ago, Bloom Energy and SK Ecoplant have transacted nearly 200 MW of projects together with over $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 $4.5 billion in equipment and future service revenue.