Varco Energy has secured £58m of debt financing facilities with NatWest to help fund its pipeline of Battery Energy Storage Systems (BESS).
With strategic advice from Carlingford, a division of GFI Securities, Varco Energy approached NatWest to help with the funding of its Native River and Sizing John BESS projects, which are both forecast to be operational in the last quarter of 2024.
Following detailed analysis of Varco’s funding requirements and forecast revenue streams, NatWest agreed to provide, as sole lender, a £50m capex facility, as well as an £8m VAT facility, and an interest rate hedging facility.
Varco has two BESS assets in the UK; Native River, a 57MW/138MWh transmission connected battery south of Liverpool, and Sizing John, a 57MW/138MWh transmission connected south of St Helens.
These assets, both being situated within a particularly congested part of the UK’s high voltage grid, will be able to provide localised balancing and stability services to the National Grid system operator, as well as broader load shifting capabilities to enable high penetration of renewable generation across the broader UK system.
Varco energy director James Mills said: “The provision of flexible and specialist capital is essential to successfully decarbonise our economy and create a more sustainable future. NatWest’s financing package enables us to deliver our first utility scale battery-based energy storage systems.”
Head of specialist asset finance at NatWest Jacob Lloyd added: “We are delighted to support Varco Energy with its new BESS projects, providing a further 114MW of energy to keep the UK moving towards a renewable future.
“As the UK continues to transition to a net zero energy system, the BESS market continues to play an important part in balancing grid instability. NatWest continues to build on its support to the BESS sector, aligning to our commitment to provide £100bn of climate and sustainable funding by 2025.”