Close Brothers Leasing, part of merchant banking group Close Brothers, has announced it is to provide a development loan for a 99.98MW battery energy storage system (BESS) belonging to Pacific Green Technologies, located at Richborough Energy Park in Kent. The funding will cover the BESS construction phase, Close Brothers said in a press release.
On June 28, law firm Gowling WLG announced that its energy team had advised Pacific Green over a senior debt facility agreement with Close Leasing.
Earlier in June, Pacific Green said it had reached a financial close for £28.25 million of senior debt for the 99.98MW BESS. It said the senior debt, in conjunction with the equity investment by Green Power Reserves Limited, will provide the Company with the funding to bring the battery park to commercial operations in June 2023.
Pacific Green said the senior debt facility agreement with Close Leasing will be used in stages following the expenditure of the equity investment.
Gowling WLG added that the loan would be refinanced into a 10-year amortised term loan upon the start of commercial operations.
According to its website, Pacific Green Technologies Group is a provider of sustainable cleantech solutions with a view to helping address climate warming, green energy and resource scarcity challenges.
James Sutcliffe, managing director of Close Brothers Leasing’s Energy team, said: “We are thrilled to participate in this ground-breaking project finance scheme on one of the UK’s largest battery energy storage systems and we look forward to working with Pacific Green on this project and the rest of their 1.1 GW UK pipeline.”
Scott Poulter, Pacific Green’s chief executive, said: “Bankable projects such as Richborough Energy Park are the cornerstone of Pacific Green’s ‘ODCO2 Energy Development Platform’, which specialises in developing and operating optimised, turnkey renewable energy and storage parks across their entire lifecycle.”
In February 2022, the UK government announced that the Department for Business, Energy & Industrial Strategy had awarded nearly £7m to UK projects developing innovative energy storage technologies, in the first round of government-backed competition.
Twenty-four projects across the UK were awarded the first round of funding through the Longer Duration Energy Storage competition, which is worth £68 million in total.
“These projects will benefit from a share of over £6.7 million to develop new energy storage technologies that can utilise stored energy as heat, electricity or as a low-carbon energy carrier like hydrogen. Successful projects could benefit from a greater tranche of funding from a second phase of the competition, which will support these projects towards commercialisation, encouraging private investment and creating new jobs,” a government press release said at the time.
The battery market was valued at $55bn in 2020 but is expected to grow at a compound annual growth rate (CAGR) of more than 13% by 2030, according to GlobalData, Leasing Life’s parent company.