Can a borrower finance an energy storage project?

However, given some of the hurdles facing these projects (such as unproven technology risk and the lack of long-term committed offtake arrangements), a number of factors need to align in a borrower’s favour for it to secure limited or non-recourse project financing to develop an energy storage project.

How are energy storage solutions financed?

Although energy storage solutions are often financed on a limited recourse project finance basis, the lending facilities used to finance energy storage solutions can take a variety of forms. Some of the more common facility types include: • Borrowing base facilities. • Asset finance facilities. • Expansion facilities.

How do Lenders look at energy storage projects?

In addition to looking at the projected revenue stream of the project, as is the case in a traditional project finance structure, lenders may look to the value of the underlying assets in an energy storage project in order to maximise the amounts available to the borrower.

Do energy storage projects require borrowing base facilities?

Due to the differing periods of contracted revenue under the various offtake agreements entered into by the borrower and therefore the fluctuating nature over time of the cashflows in an energy storage project, some lenders may only be willing to provide borrowing base facilities in respect of energy storage projects.