SAE completes financial close for the AW1 Battery Storage project

SAE has announced the financial close of its AW1 battery storage project (AW1) at the Uskmouth Sustainable Energy Park (USEP).

The AW1 project is a 240 MWh battery storage project with the ability to increase to 480 MWh. The project is owned and is being constructed by AW1 Energy Storage Limited (AWES), a company dedicated to the construction, ownership and operation of this project. The Group has entered into various agreements that have unlocked this project and enabled AWES to successfully secure £67.4m in funding to develop, build, own and operate the Group’s first battery storage project. Throughout the process, Elgar Middleton Infrastructure and Energy Finance LLP has acted as the financial advisor to AWES. Project financing is being provided to AWES through a facility agreement (FA) with Norddeutsche Landesbank Girozentrale (Nord/LB), a leading German commercial bank and a prominent financier of renewable energy projects for over 30 years. Nord/LB is providing £45.3m of non-recourse project finance on market-standard commercial terms. The loan is forecast to be repaid by ProjectCo from project cashflows. The term of the FA runs until December 2031, at which point the loan will be repaid or refinanced by AWES.  Under the terms of the FA, Nord/LB has taken security over all assets and shares in AWES, as is customary in project financing transactions. 

The shares in AWES are held 100% by a holding company, AW1 Storage Holdings Limited.  SAE owns a controlling 75.3% shareholding in this holding company, with the remaining 24.7% minority stake being owned by BESS Investment UK Limited, part of a global renewable energy group, which has committed to an equity investment of £4.2m into the holding company and a £3.6m shareholder loan to AWES.  Alongside this, SAE is providing a £3.1m equity investment into the holding company and a £11.1m shareholder loan to AWES.

The project has a contracted grid connection date of October 2026, which will allow for project commissioning, and an anticipated full commercial operations start date during Q1 2027.