CMS has advised global energy storage specialist Eku Energy in relation to the development and project financing of the 99MW/198MWh Ocker Hill Battery Energy Storage System (BESS) project, UK.
The deal secured over £45m in debt funding from NatWest Bank and Sumitomo Mitsui Banking Corporation (SMBC) to enable construction of the new 99 MW/198 MWh project located at Ocker Hill, between the towns of Dudley and Wednesbury in the West Midlands. In addition to the asset specific financing, SMBC and NatWest have provided an uncommitted accordion facility of £100m to support funding of Eku Energy’s near-term UK projects.
The Ocker Hill BESS will use 54 Tesla Megapacks, and the project will be built by H&MV Engineering as the Balance of Plant contractor. SmartestEnergy, a 100% owned subsidiary of Marubeni Corporation, will serve as the tolling provider under a 10-year agreement.
Daniel Burrows, Chief Executive Officer at Eku Energy said: “Eku Energy’s growing portfolio in the United Kingdom reflects our commitment to deliver safe, secure, and reliable energy storage solutions that will provide cost-effective clean energy. By securing strong financial backing from NatWest Bank and Sumitomo Mitsui Banking Corporation for the Ocker Hill BESS and partnering with Tesla and SmartestEnergy, we are continuing to expand our role in building a more flexible and resilient energy system for the United Kingdom."
Mahul Raval, Senior Vice President of Trading at SmartestEnergy said: "We are delighted to be partnering with Eku Energy on the tolling agreement for the Ocker Hill BESS. This project is the longest tolling agreement announced to date in the United Kingdom."
CMS’s advice was led by Energy Finance partner Nicholas Ross-McCall, and Energy & Climate Change partners Louise Dalton (advising on the revenue arrangements) and Phil Duffield (on the construction arrangements).
Nick Ross-McCall comments: “We are pleased to have assisted Eku Energy to a successful closing on Ocker Hill, liaising with strong project partners and lenders, and supporting Eku Energy’s global energy storage growth targets. The deal further evidences CMS’s leading position in energy storage financing.”
Louise Dalton adds: “This is one of the first UK battery debt financings backed by a long-term tolling agreement, which is an exciting innovation in the ever-changing storage market. We congratulate Eku and SmartestEnergy for concluding this market-leading toll arrangement.”
This deal further emphasises CMS’s market-leading energy storage practice, with CMS having recently been named Law Firm of the Year at the 2024 Energy Storage Awards ceremony and subsequently named Legal Adviser of the Year at the Energy Storage Investment Awards 2024.
