How lenders are banking BESS in a volatile Nordic market

At the Solarplaza Summit Nordics in Copenhagen on 15 September 2026, one session addressed a question every Nordic developer is asking: who will finance batteries when revenues are so hard to predict? Silas Harbo, Partner and Country Manager Denmark at Infranode, took audience questions on how an infrastructure fund prices risk. A lending panel then followed, moderated by Øystein Kvarme, Senior Advisor at Capcora, with Anastasia Gurnell, Associate Director at NORD/LB, Utku Bildik, Associate Director at ABN AMRO, and Andreas Ditlev Duckert, Independent Solar & Storage Investor.

Key takeaways

• Higher returns for more risk: Infranode's investors now expect double-digit returns, up from around 8% on its early PPA-backed solar investments, and accept more merchant exposure to get there.
• Hybrids make baseload bankable: A synthetic baseload built from solar plus storage shifts delivery risk to the offtaker. Traditional baseload PPAs with an hourly delivery obligation remain off-limits for lenders.
• Contracting thresholds: ABN AMRO would want around 50–60% of revenues contracted to finance a standalone BESS in the Nordics, and it has financed 16 battery projects in Northwest Europe, none in the Nordics yet.
• Structure over guarantees: Cash sweeps, target debt balances, and conservative revenue assumptions protect lenders more than supplier warranties, which Gurnell doubts could ever be successfully called on.

The investor view: returns up, leverage down

Infranode deploys mainly Nordic institutional capital with a 25-year investment horizon, and has so far invested only in Norway, Sweden, Finland, and Denmark. Harbo explained that its first solar investments, developed with Alight and backed by 20-year PPAs, targeted returns of around 8%. Its next renewable investment, the 162 MW Vandel III solar park in Denmark, was built fully merchant and all-equity, at slightly higher but still single-digit return expectations.

Rising interest rates have changed that. Infranode's investors now look for double-digit returns, and Harbo said they are willing to take more merchant risk rather than contract everything away. The catch is that falling capture rates and rising curtailment make that equation "a bit tricky to stack up" right now. He added that the market no longer sees renewables as behaving like a bond.

Vandel III: managing merchant exposure in practice

Vandel III shows how a merchant asset gets managed once the market turns. In 2024, the park saw a sudden drop in capture rates and 8% curtailment, rising to 10–12% in 2025. Infranode responded on three fronts:

• Short-term hedges: Over the past two summers, it signed six-month hedges with utility offtakers to cover the weakest period.
• A new kind of optimizer: It replaced a balance-responsible party charging flat fees with an AI-driven optimizer that shares risk and optimizes across day-ahead, intraday, and PPA positions. Harbo described this as "taking the power back to the asset owners."
• Storage: A 60 MW/120 MWh battery, developed over 12 months, was set to be inaugurated the week after the summit.

Curtailment has been lower in 2026, so the battery may end up doing less to reduce it than first expected. Harbo still sees a lasting case in the spread between midday and afternoon prices.

The low leverage is deliberate. Because Infranode wants yield from day one and avoids heavy debt, it can absorb swings in revenue without renegotiating with banks every time production deviates from plan.

Why hybrids change the conversation with banks

Kvarme set a sober tone for the panel. Several large European developers have recently gone into insolvency, and he noted that banks on the continent are withdrawing credit lines, even from existing clients. The question his IPP clients keep asking is how to find flexible capital when it is getting scarcer.

Baseload, but not as lenders knew it

For Gurnell, the word baseload used to end conversations. "If we ever jumped on a call with a new client and they said they had baseload offtake for the last couple of years, it was a pretty solid red flag," she said. A traditional baseload PPA obliges the producer to deliver power every hour, something solar or wind cannot guarantee.

Storage changes that. A hybrid project can create a synthetic baseload, with renewable generation and a battery wrapped into one product for the offtaker. The delivery risk then sits with the buyer rather than the producer, which Gurnell called "very much something we can bank." She noted that such deals are being discussed but have not yet been executed.

Solar on its own is no longer enough

Bildik said ABN AMRO sees few standalone wind or solar projects in the Nordics coming to it for financing. When it does provide terms, they are conservative: debt of up to 20 years, but with 70–80% of production contracted for at least 10–15 years and cautious merchant assumptions. With all that in place, equity returns often no longer add up.

Pairing a well-contracted solar or wind asset with a less-contracted battery is where he sees the "sweet spot." The contracted generation gives lenders comfort, so they can accept less contracted revenue on the battery side. For new solar, adding BESS at construction or keeping it firmly in the pipeline is now nearly a requirement. In Spain, Bildik said, almost half of the bank's existing solar clients are working on hybridization, mostly to save their solar projects.

Duckert questioned whether co-location is ever an exciting investment or mainly a rescue. Gurnell pointed out that investors have mostly built standalone batteries in the UK to chase high returns, not to fix struggling solar parks.

How lenders build flexibility into BESS debt

The Nordic battery market still lacks a liquid offtake market for storage, and that is the main barrier for lenders. Bildik said ABN AMRO has financed 16 battery projects across Northwest Europe, but none in the Nordics yet. To finance a standalone BESS there, it would want around 50–60% of revenues contracted.

Gurnell said NORD/LB has done more standalone BESS than co-located projects, largely in the UK and Germany, where capacity markets, tolls, and floors are available. In co-located deals, the renewable side has usually been highly contracted while the battery has sometimes been fully merchant. Detailed merchant and breakeven analysis allows the bank to take a more bullish view on how much a battery needs to be contracted, but much of the protection comes from how the debt itself is structured.

The tools lenders use

• Cash sweeps: Gurnell said she has not financed a single battery without at least one sweep. An upside sweep kicks in when the project performs well above plan, so lenders are repaid faster in the good years. A warranty sweep requires early repayment if the owner cycles the battery beyond its warranty.
• Target debt balance: Battery loans are typically structured as mini-perms. A minimum repayment schedule leads to a 50–60% balloon, with variable repayments on top. If revenues fall short, the borrower gets a grace period of one to three repayment periods before default, with the aim of reaching a 40–45% debt balance at maturity.
• Front-loaded gearing: Bildik described offering higher gearing at the start, paired with faster amortization, as well as merchant tails. ABN AMRO has even financed fully merchant BESS in some jurisdictions, though it prefers a more balanced mix.
• Conservative revenue assumptions: NORD/LB does not bank on today's high ancillary service prices. "Whether Aurora Energy Research tells us that they will fall away in six months or two years, I think the safer bet is to just assume that they will not be there once the project reaches COD," Gurnell said.

Optimizers under the lens

When a battery is not tolled, the optimizer's performance becomes part of the credit case. Bildik said lenders want optimizers that can be easily replaced if they underperform. Where an optimizer also provides a floor, the bank checks its balance sheet, and ABN AMRO may apply a 5–10% haircut to the optimizer's expected performance compared to market curves.

Teaching credit committees

Duckert asked the bankers how they get these structures past credit committees when battery revenues can halve within a year. Bildik said it took ABN AMRO four to five years of run-off and breakeven analysis, done together with its risk team, to get comfortable. The bank also relies on a portfolio approach: if merchant prices collapse in one market, returns elsewhere balance it out.

Red flags, and the case for contracting less

Products lenders are wary of

Asked which long-term revenue contracts raise red flags, both bankers pointed to battery floors with clawback clauses, common in the UK. If the project fails to reach its floor by the end of the contract, the offtaker can extend the contract or reclaim the shortfall from the project. NORD/LB still finances them where there is enough headroom or a reserve, but Gurnell was blunt: "It's great marketing, but they're not floors."

Bildik said ABN AMRO will no longer finance that product on a standalone basis. He also listed two other concerns:

• Floors set too low: A floor covering only 20–30% of revenues offers unclear protection, yet developers still ask for contracted-level gearing. ABN AMRO expects a floor to cover at least 40–50% of revenues.
• Day-ahead swaps: In his view, they work well for the offtaker but add risk for the project and its lenders.

Supplier warranties carry limited weight

An audience question asked how closely lenders assess the bankability of hardware suppliers. Gurnell was candid. Most suppliers are Chinese manufacturers, and "I don't think that we would be looking to call on a Chinese manufacturer's warranty and hoping for success." What reassures lenders more is that solar and battery equipment is largely interchangeable, so a failed supplier can be replaced. In wind, an investment-grade turbine supplier might earn a project a 10–30 basis point lower margin. In solar and BESS, she said, suppliers are "much of a muchness."

Duckert: hedge less, layer the debt

Duckert, who spent 16 years doing M&A at a large solar IPP, argued that many sponsors contract too much. Too many producers are trying to buy hedges, and too few parties are willing to sell them, which pushes hedging prices up. His alternative is a different capital structure: keep senior debt low enough to keep banks comfortable, then add junior or private debt that accepts more merchant exposure. Leverage is lower and debt costs more, but the sponsor keeps more upside and can achieve a higher overall IRR.

He also sees the relationship with lenders shifting. Where project finance once ran on fixed formulas for P90 production and contracted revenue, it is now "more a conversation" about how to share risk. Kvarme agreed, noting that more deals now allocate risk to whoever is best placed to carry it.

An alternative to the bank: vendor finance

Ruben Valiente, Managing Director at Maxxen, opened the session with a different route. His starting point was that offtake risk is what makes banks ask for tolling agreements, and tolling caps the upside a sponsor can earn. According to Valiente, project finance can reach around 80% leverage with a tolling agreement, but perhaps only 50% without one.

His alternative is vendor finance, in which the battery supplier leases the equipment to the project. Valiente compared the two models:

Because equipment can make up around 70% of a BESS project's cost, a lease can deliver roughly that share of leverage without a tolling contract. The security is the battery itself: if the sponsor cannot pay, the vendor can move the containers to another market. Valiente also stressed the alignment of incentives. If the battery fails in year seven, the sponsor stops paying, so the supplier has every reason to keep it running. He was clear that "project finance will still be king," but sees leasing as a useful option for BESS in particular.

Closing words

Lenders want to finance Nordic batteries, but on their own terms: contracted revenue where it counts, structures that pay debt down fast in good years, and no reliance on ancillary prices that may disappear. For sponsors, the session showed there are now more ways to finance storage than a few years ago, from hybrid structures and junior debt to vendor leases. Each comes with a trade-off between leverage, cost, and how much merchant upside the sponsor keeps.

If you want the full picture of the market dynamics, flexibility needs, and PPA discussions from the Solarplaza Summit Nordics, read our complete event report: Nordic renewables are learning to live with volatility. Here's how.