German lender UmweltBank has provided financing for an 11 MW/22 MWh standalone battery energy storage system (BESS( in Halle (Saale), Germany, using a financing structure based entirely on merchant market revenues.
The project, developed with CCE, was financed without floor-price or tolling agreements. UmweltBank said the 10-year financing structure is designed to maximize operational flexibility and revenue opportunities for the investor.
Holger Donhauser, head of renewable energy financing at UmweltBank, said only nine weeks elapsed between the customer’s investment decision and the first loan disbursement, reflecting the coordination between the parties involved.
UmweltBank entered the battery storage financing market earlier this year and said it has already financed several standalone and co-located battery projects.
Goran Basic, a member of UmweltBank’s management board, said the main challenge for battery storage financing is assessing long-term technical performance and future revenues. He said banks often take a more conservative view of merchant revenue risk and battery degradation than developers and investors.
The bank said it plans to finance additional storage projects, adding that co-located solar-plus-storage plants are emerging as the industry standard because of their strong economics. It said these projects are frequently supported by hybrid power purchase agreements (PPAs), an area where the bank has experience through PV and wind financing.
UmweltBank also said it plans to finance its first wind farms with integrated battery storage next year and is already developing a suitable PPA structure.
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