Romania’s standalone Scornicesti battery secured non-recourse financing of up to 44 million euros from the European Bank for Reconstruction and Development (EBRD), supported by InvestEU. The 127 MW project has 254 MWh of storage capacity. Its financing provides a regional precedent for project finance with substantial merchant-revenue exposure and no classic long-term offtake contract.
The financing depends on a strong operating and contractual framework, rather than treating merchant income as equivalent to contracted revenue. Renewable-energy project finance has traditionally relied on long-term offtake contracts to stabilise income. Standalone batteries can instead charge and discharge and move between markets, capturing value from flexibility rather than selling one fixed-price product.
In place of a classic power purchase agreement (PPA), lenders can rely on protections including an optimiser or storage-services agreement. Such contracts can define dispatch authority, market-access obligations and revenue sharing. Technical warranties need to protect usable capacity and availability, while the financial model should use hourly scenarios and conservative assumptions about spread compression and balancing-price compression.
Debt sizing must distinguish merchant from contracted revenue. Grants can reduce leverage pressure, and Romania’s Modernisation Fund has opened a 150 million euros call for standalone storage. Until the regional market has a longer operating history, banks are likely to seek lower leverage, stronger reserve accounts or greater sponsor support.
A floor-price or tolling component can support higher leverage by turning part of a battery project’s cash flow into income closer to contracted revenue. A battery energy storage system (BESS) PPA is not essential if lenders can establish who controls the battery, how it generates cash and which risks contracts transfer. They also need to assess performance if market volatility is lower than the sponsor expects.
The Scornicesti project shows that merchant exposure can be financed when lenders can identify the project’s controls, revenue sources and risk protections. Disciplined risk allocation remains necessary even when a PPA is not in place.