US-based hydrogen fuel cell provider Plug Power has announced that it is forming a strategic partnership with South Korean conglomerate SK Group to enhance its footprints in the Asian hydrogen market.

As part of the deal, SK Group will acquire a 9.9% pro forma ownership stake in Plug Power with an investment of $1.5 billion and form a joint venture company in South Korea to support the rapidly growing Asian market.

SK Group’s US subsidiary will purchase around 51.4 million shares for $29.28 per share, and the investment transaction is expected to be closed in the first quarter of 2021, Plug Power said in a press statement.

Andy Marsh, Chief Executive Officer of Plug Power, said the current relationship with SK Group offers immediate strategic benefits to Plug power to accelerate its expansion into Asian markets.

“The partnership is intended to result in a formal joint venture by 2022. Due to the complementary strength in this partnership, we expect rapid growth and significant revenue generation from the joint venture that is incremental to our 2024 plan,” he added.

Morgan Stanley served as a financial advisor, and Goodwin Protector acted as a legal advisor to Plug Power.

The government of South Korea announced the Hydrogen Economy Roadmap through 2040, intending to produce over 500 million metric tons of hydrogen annually. The plan also includes producing 6MM fuel cell electric vehicles, 15 GW of fuel cell power generation, and 1,200 refilling stations. The government expects to take its hydrogen economy’s cumulative economic value to $40 billion by 2040.

In November 2020, Plug Power raised $1 billion in one of the largest bought equity deals in the cleantech sector. The company also unveiled plans to develop five regional green hydrogen facilities in the United States.

According to Mercom Research, the company launched a convertible green bond offering in the US in May 2020. The net proceeds from the offering would fund strategic initiatives that underpin the company’s green hydrogen strategy, and the repurchase of previously issued notes whose proceeds were used to fund such strategic purposes.

According to Rystad Energy research, the global pipeline of utility-scale green hydrogen projects with capacities greater than 1 MW now exceeds 60 GW, with 87% of this capacity coming from gigawatt-scale projects.