240 MWh battery storage project financed at 78% debt without a corporate guarantee
An early-stage storage developer with a strong site, a weak balance sheet, and a $94M build to fund. We built the project-finance package, ran the lender process, and reached NTP without putting the parent on the hook.
- $94M project cost against $21M of developer equity capacity, 78% leverage required to make IRR work.
- No corporate guarantee available, parent balance sheet too thin to credibly underwrite one.
- Revenue stack mixing capacity payments, ancillary services, and merchant arbitrage, lender models could not price all three.
- Battery degradation curves disputed between the OEM, the developer's engineers, and the lender's technical advisor.
- EPC fixed-price wrap not yet signed at start of lender outreach.
Revenue stack modeling
Built a probabilistic revenue model across capacity, ancillary, and merchant tranches with a 1,000-iteration Monte Carlo. P50, P90, and P99 cases handed to lenders with full assumption visibility.
Degradation negotiation
Brokered a three-party warranty schedule between OEM, developer, and lender technical advisor, locking residual capacity at year 10 and year 15.
EPC wrap & contingency
Negotiated EPC fixed-price wrap with liquidated damages, then layered a 6% contingency reserve to satisfy the lender base case.
Lender process
Ran a structured RFP across 6 project-finance banks. Drove three to firm term sheets at 75% or higher leverage; selected the lead on covenant package, not headline rate.
A Northern European battery storage developer holding a 240 MWh permitted site with grid connection secured. Total project cost $94M, internal equity capacity $21M, and a developer balance sheet too thin to support a corporate guarantee. The team had been quoted 60–65% debt by two banks demanding a parent guarantee they could not provide. Project IRR penciled at 14.3% unlevered, but only if leverage cleared 75%.
- Month 1
Diagnostic & financial model
Project model rebuilt with probabilistic revenue stack. Equity IRR triangulated against required leverage.
- Month 2
Degradation & EPC
Three-party warranty schedule agreed. EPC fixed-price wrap signed with LDs and 6% contingency.
- Month 3
Lender outreach
6-bank RFP launched. NDAs and data room access live in week 9.
- Month 4–5
Term sheets
Three firm term sheets received at 75%, 77%, and 78% leverage. Selected the 78% offer on covenant flexibility.
- Month 6
Documentation
Common terms agreement, intercreditor, and direct agreements negotiated. Independent engineer signed off.
- Month 7
FID & NTP
Final investment decision reached. Notice to proceed issued to EPC. First drawdown completed.
- $73M of senior project-finance debt closed at 78% leverage, no parent guarantee.
- Equity IRR re-rated from 11.2% to 18.6% on the new capital stack.
- NTP issued 7 months from FID, two months ahead of the developer's internal plan.
- Project template adopted by the developer for two follow-on sites already in permitting.
- Lender relationship now anchored for the developer's next three projects.
- 01
Probabilistic revenue modeling is the difference between 60% leverage and 78% on a hybrid revenue stack.
- 02
Lender selection on covenant flexibility beats headline rate every time on a developer's first large project.
- 03
EPC wrap plus contingency reserve is the single fastest path to lender base case acceptance.
"Two banks told us we needed a corporate guarantee we couldn't sign. CapMaven built the model that proved we didn't, and then ran a process that got three banks competing for the deal."
How does this work for developers without a permitted site?+
It doesn't, yet. We come in at FID or 90 days before. Pre-permit financing is a different exercise: development capital, not project finance.
Did the lender require an offtake contract?+
Two of the three bidders did. The selected lender accepted the probabilistic revenue stack with a P90 floor mechanism in lieu of a fixed offtake, which preserved merchant upside.
Can the same structure work for solar or wind?+
Yes, but the revenue stack is simpler (PPA-heavy) and the leverage ceiling is higher already. The differentiator on storage is the merchant component, which is where modeling work earns its return.
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