Romania’s Scornicesti standalone battery project secured non-recourse financing of up to EUR 44 million from the European Bank for Reconstruction and Development (EBRD), supported by InvestEU. The project has 127 MW of power capacity and 254 MWh of storage capacity. Its financing shows that project finance can accommodate substantial merchant-revenue exposure without a classic long-term offtake contract.
The deal depends on an operating and contractual framework strong enough for lenders to assess how the battery will earn money and which risks are transferred. Renewable-energy project finance has traditionally relied on long-term offtake contracts to stabilise revenue. Standalone batteries instead create value through the flexibility to charge and discharge and move between markets, rather than selling a single fixed-price product.
A package of protections can take the place of a classic power purchase agreement (PPA). An optimiser or storage-services agreement can set out dispatch authority, market-access obligations and revenue sharing. Technical warranties also need to protect usable capacity and availability. Financial models should use hourly scenarios and conservative assumptions for spread compression and balancing-price compression.
Merchant income cannot be treated like contracted revenue when sizing debt. Grants can reduce pressure on leverage in standalone-storage project finance; Romania’s Modernisation Fund opened a EUR 150 million call for standalone storage. Until the regional market develops a longer operating history, banks are likely to require lower leverage, stronger reserve accounts or greater sponsor support.
A floor-price or tolling component can support higher leverage by converting part of a project’s cash flow into income closer to contracted revenue. A BESS PPA is not essential if lenders can identify who controls the battery, how it generates cash, which risks are contractually transferred and how it would perform if market volatility is lower than the sponsor expects. The financing structure must make those risks and protections clear to lenders.
