Romania’s Scornicesti standalone battery project secured non-recourse financing through a package of up to 44 million euros 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 demonstrates that project finance can accommodate substantial merchant-revenue exposure without a classic long-term offtake contract when the operating and contractual framework is strong enough.
Renewable-energy project finance has traditionally relied on long-term offtake contracts to stabilise revenue. Standalone batteries instead generate value through the flexibility to charge and discharge and move between markets, rather than being tied to one fixed-price product. Merchant income, however, cannot be treated as equivalent to contracted revenue when sizing debt.
A package of contractual and technical protections can substitute for 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 need to protect the battery’s usable capacity and availability.
Lenders also need a financial model built around hourly scenarios, with conservative assumptions about spread compression and balancing-price compression. For a battery energy storage system (BESS), a PPA is not essential if lenders can identify who controls the battery, how it generates cash, which risks are transferred contractually and how it performs if market volatility is lower than the sponsor expects.
Romania’s Modernisation Fund has opened a 150 million euros call for standalone storage, with grants able to reduce pressure on leverage. Until the regional market has 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 battery project’s cash flow into income closer to contracted revenue. The Scornicesti financing shows that a PPA is optional, while disciplined risk allocation is not.