SWGT and Santander UK announce the £28m financial close of phase two of the Mannington Battery Storage Project
Following its press release in November 2020, Still Waters Green Technology (“SWGT”), the leading independent battery energy storage system (“BESS”) asset manager in the United Kingdom, is pleased to announce financial close of Phase 2 of the Mannington project being an extension of the project into a 35MW/70MWh (2 hour duration) utility-scale, subsidy-free BESS asset located in Swindon, England. SWGT have secured a non recourse project finance debt solution with Santander UK Plc totalling £28m in support of the construction and operation of the asset.
Scheduled to reach commercial operations in October 2021, this grid scale, front-of-meter (“FTM”) battery asset is on track to become the first operational two-hour duration BESS asset in the UK, being among the top-three largest energy storage sites in the UK. Santander’s project finance team provided finance by structuring traditional project finance debt alongside a debt tranche supported by their Environmental & Social Growth Funding (“ESGF”) solution. This multi tranche structure allowed Santander to match the appropriate debt solution to the various elements of the revenue stack, including non contracted or merchant revenue. Santander and SWGT worked together to innovate both the asset design and the debt solution.
With its immediate pipeline of over 200MW under development, SWGT has accelerated its growth to become one of the UK’s largest independent battery storage asset owners, developers and operators. SWGT is working with partners to apply sophisticated data-analysis algorithms to optimise the economic value of the battery. The algorithm, relying on multiple data sources, will inform and direct the battery how to best stack opportunities to maximise revenue. The Mannington project site houses fifty 40-ft containers which integrate market leading lithium batteries and will provide up to 75GWh of annual import and export capacity to the National Grid, a material contribution towards helping to deliver the UK’s Net Zero ambition.
Olivia He, chief investment officer at SWGT said: “As energy storage trading and optimisation evolves, longer duration batteries represent the cutting edge trend in the UK power market. Mannington Phase Two financial close allows us to seize this market opportunity at the very beginning of 2021. We were hugely impressed by Mark Cumbo and Santander’s banking teams’ professionalism, expertise and efficiency, making it possible for a highly innovative and complex transaction to be completed expeditiously. With the successful launch of the Mannington flagship project, SWGT is ready for scalable and exponential growth that contributes to the green energy transition both locally and globally.”
Mark Cumbo, director, Specialised & Project Finance, Santander UK: “Santander is delighted to have closed the second phase of this exciting project with SWGT. This agreement further demonstrates our ability to work with ambitious teams like SWGT to deliver complex and innovative funding solutions for projects that trade on a predominantly merchant basis. Battery Energy Storage is an important and fast- growing sector that we are keen to support.
“This was also a key project for the bank as it was our first SONIA linked transaction completed under a project finance structure. This project was delivered alongside our specialist relationship banking team, led by Rakesh Ramana. Rakesh and I look forward to working closely with Olivia and the SWGT team on future projects and positively contributing to the wider climate change agenda.”
Santander was advised by TLT LLP (legal), RSM (financial model) and Aon (insurance).
