Varco Energy secures £58 million for UK BESS projects from NatWest

Varco Energy secures £58 million for UK BESS projects from NatWest

Fluence is the largest battery storage system integrator in the world, while GE Vernova is part of the electronics and engineering giant GE. Image: Fluence.

Battery storage asset owner and operator Varco Energy has secured £58 million of debt financing facilities from NatWest to fund its pipeline of battery energy storage systems (BESS).

Varco Energy approached NatWest to facilitate the financing required for its Native River and Sizing John BESS projects, both of which are projected to become operational in the final quarter of 2024. Following an evaluation of Varco’s financial needs and projected revenue, NatWest agreed to serve as lender, offering a £50 million capex facility, an £8 million Value Added Tax (VAT) facility, and an interest rate hedging facility.

Varco Energy currently operates two BESS assets in the UK. Native River, a 57MW/138MWh transmission-connected BESS located south of Liverpool, and Sizing John, a 57MW/138MWh transmission-connected facility south of St Helens. 

These assets are within a congested segment of the UK’s high-voltage grid and will play a crucial role in providing localised balancing and stability services for the National Grid ESO. They will also enable broader load-shifting capabilities, facilitating the integration of renewable energy generation into the wider UK grid.

Varco Energy received advisory support from Watson Farley & Williams LLP, an international law firm specialising in the energy and transport sectors, and Carlingford, a specialised debt advisor and arranger in the broader natural resources sector.

James Mills, director of Varco Energy 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. We are excited to have secured this initial facility with one of the leaders in the specialist BESS financing market, are grateful to Natwest for their funding support, and look forward to working together to help build out our remaining pipeline.”

Jacob Lloyd, head of specialist asset finance at NatWest, added: “We are delighted to support Varco Energy with their new BESS projects, providing a further 114MWs 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.”

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