Bloom Energy and SK ecoplant expand Hydrogen Power Generation partnership
Bloom Energy, a leading energy company, and SK ecoplant, an affiliate of South Korean conglomerate SK Group, today 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.
The partnership includes purchasing a minimum of 500 megawatts (MW) from Bloom Energy, representing a $4.5 billion revenue commitment; co-creating two hydrogen innovation centers; and targeting an equity investment of approximately $500 million.
SK ecoplant Contracts a Minimum of $4.5 Billion in Equipment and Service Revenue Over Three Years
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 $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.
“Bloom Energy is SK ecoplant’s largest strategic partner in clean energy,” said Kyung-II Park, CEO, SK ecoplant. “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. 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.”
“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. “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.”
SK ecoplant and Bloom Energy 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 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.
SK ecoplant to Invest Approximately $500 Million in Bloom Energy
SK ecoplant will invest $255 million in Bloom Energy by acquiring 10 million shares of zero coupon, non-voting redeemable convertible preferred stock at a price of $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 a maximum ownership of 15 percent.
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.
Bloom Energy intends to use the proceeds for market growth, rapid commercialization of hydrogen solutions, and for general corporate purposes.
Timing and Advisors
The investment is subject to customary closing conditions and regulatory approvals and is expected to close within 45 days.
Centerview Partners LLC is serving as financial advisor to Bloom Energy.