Securing debt for battery energy storage with Brandon Faber (Director @ NORD/LB)

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Feb 27, 2025

Brandon Faber, Director at NORD/LB, shares his expertise in financing renewable energy, focusing on battery energy storage projects. He discusses the complexities of raising capital in this field, including how banks evaluate and structure financing. Brandon elaborates on the significance of tolling agreements and how merchant risk impacts lending decisions. He also highlights the relationship between solar energy and battery storage, while shedding light on the evolving landscape shaped by incentives from the Inflation Reduction Act.

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ANECDOTE

NordLB's Early Battery Project Financing

NordLB financed the largest standalone battery storage project (250 MW) in 2021 with Recurrent Energy (Crimson Project).
They later financed the largest solar-plus-storage project (Gemini) in 2022.

INSIGHT

Shifting Risk Tolerance

Banks initially hesitated to finance merchant energy storage projects, expecting to become more comfortable over time.
However, the increasing prevalence of tolling agreements might reduce the need for banks to take on merchant risk.

INSIGHT

Nuances of Tolling Agreements

Tolling agreements, often seen as low-risk, have nuances like utility bankruptcy and performance obligations.
These risks can be mitigated through long-term service agreements that guarantee performance thresholds.

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Raising capital is one of the biggest challenges in the energy storage industry today. While banks and institutional investors are providing more financing than ever, securing debt for battery projects still comes with complexities - especially when dealing with merchant risk.

So, how are lenders evaluating storage projects, and what does it take to get a deal across the line?

This week on Transmission, Quentin is joined by Brandon Faber (Director at NORD/LB) - to discuss the evolving landscape of battery energy storage financing.

With experience structuring large-scale energy deals, including the Goleta and Papago Storage Projects, Brandon provides a deep dive into how banks assess risk, the role of tolling agreements, and the future of debt financing for grid-scale storage.

In this episode, you’ll learn about:

How banks evaluate and structure financing for energy storage projects.
The role of tolling agreements and why they matter for securing debt.
Why some projects secure financing while others struggle.
How merchant risk is priced into energy storage lending.
The future of institutional investment in battery storage.

About our guest

Brandon Faber serves as a Director at NORD/LB, a German bank known for its active role in financing renewable energy projects, particularly battery energy storage systems (BESS).

Brandon’s expertise lies in structuring and managing financing for large-scale energy projects, including the Goleta Energy Storage Project in California and the Papago Storage Project in Arizona. These projects exemplify NORD/LB’s commitment to supporting grid stability and the energy transition through innovative financing solutions.

With a strong presence in the North American market, Brandon has also contributed to discussions on risk investment management in energy storage, providing valuable insights into the evolving landscape of renewable energy financing.

About Modo Energy

Modo Energy helps the owners, operators, builders, and financiers of battery energy storage solutions understand the market - and make the most out of their assets.

All of our podcasts are available to watch or listen to on the Modo Energy site. To keep up with all of our latest updates, research, analysis, videos, podcasts, data visualizations, live events, and more, follow us on LinkedIn or Twitter. Check out The Energy Academy, our bite-sized video series breaking down how power markets work.