Plug Power Inc, a provider of hydrogen fuel cell and fuelling solutions enabling e-mobility, and South Korea- based SK Group, have announced that they intend to form a strategic partnership to accelerate hydrogen as an alternative energy source in Asian markets. Through this partnership, Plug Power and SK Group intend to provide hydrogen fuel cell systems, hydrogen fuelling stations, and electrolyzers to the Korean and broader Asian markets. In line with this partnership, the companies have also entered into a definitive agreement for SK Group to make a $1.5 billion strategic investment in Plug Power and are announcing a plan to form a joint venture company in South Korea to support the rapidly growing Asian Market.
The investment transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in the first quarter of 2021. Morgan Stanley & Co. LLC is serving as financial advisor and Goodwin Procter LLP is acting as legal advisor to Plug Power.
In January 2019, the South Korea government announced the Hydrogen Economy Roadmap through 2040, with ambitious goals, including 1,200 refilling stations and 15 GW of fuel cell power generation, and expects the cumulative economic value of its hydrogen economy to reach approximately $40 billion by 2040.
“SK Group has an established strategy for building out the hydrogen economy in South Korea and beyond,” said Andy Marsh, CEO for Plug Power. “The current relationship with SK Group offers immediate strategic benefits to Plug Power to accelerate its expansion into Asian markets – and is intended to result in a formal joint venture by 2022. Due to the complementary strengths in this partnership, we expect rapid growth and significant revenue generation from the joint venture that are incremental to our 2024 plan.”
“Plug Power is a leading player in the hydrogen industry with decades of experiences and distinguished business model,” said Hyeongwook Choo, Head of Hydrogen Business Development Center of SK Holdings and president & CEO of SK E&S, a subsidiary of SK Holdings. “This partnership between Plug Power and SK will bring significant and solid opportunities in the hydrogen industry, creating value to society. SK Group is focusing and actively investing into the ESG sector and Plug Power would be one of our splendid footprints within this strategy.”
