Watson Farley & Williams (“WFW”) advised Commerzbank AG and ABN AMRO on a €60m senior secured debt financing of a portfolio of nine German battery energy storage projects (“BESS”) developed by terralayr, totalling approximately 112 MW (238 MWh) of installed capacity. Both banks acted as mandated lead arrangers and original lenders.
The debt financing has been structured as a seven‑year mini‑perm, comprising €49m in senior secured term debt, further €11m in senior secured facilities and a €100m accordion to support future portfolio expansion. The structure is designed to accommodate the portfolio nature of the assets and enable the addition of further projects over time under agreed criteria, supporting terralayr’s continued growth.
The transaction features several innovative elements, including the financing of a portfolio of multiple assets, structured to allow the sponsor to benefit from portfolio effects and accommodate future growth. The portfolio benefits from a balanced commercial structure, combining contracted and merchant revenues. A total of 55 MW is secured under a seven-year capacity tolling agreement with Vattenfall, providing stable, long-term revenues that support the financing. The remaining 57 MW is commercialised on a merchant basis and is optimised via terralayr’s software platform LAYR, which virtualises battery assets and acts as a route-to-market solution. The platform enables participation across ancillary services, wholesale power markets and terralayr’s Virtual Battery Auctions (VBAs), and allows multiple independent optimisers to access the capacity.
The cross-border WFW Energy team that advised the lenders was led by Hamburg Project & Structured Finance Partner Thomas Hollenhorst. He was supported by London Finance Partner Katherine Best and an experienced Finance team including Munich Managing Associate Roman Schneider, Hamburg Managing Associate Jakob Paluszkiewicz, Munich Associate Stefan Riedmeyer and Frankfurt Associate Alkistis Vallianatou. Corporate advice was provided by Hamburg Partner Carolin Woggon and Senior Associate Dr Sarah‑Sophie Jacob. Regulatory expertise was provided by Hamburg Partner Dr F. Maximilian Boemke and Associate Dr Philipp Kleiner, with Hamburg Partner Verena Scheibe, Frankfurt Managing Associate Manuel Rustler and Munich Associate Finn Ortmeier advising on tax law matters.
Thomas commented: “We are pleased to have advised the lending banks on this landmark financing of a German BESS portfolio. Transactions of this nature require the careful alignment of innovative commercial structures with robust, bankable project finance documentation. This transaction demonstrates strong market appetite to finance BESS platforms in Germany and highlights the bankability of portfolio-based battery storage structures. Drawing on WFW’s deep expertise in complex energy and infrastructure financings, this structure also provides a scalable blueprint for future BESS portfolios in Germany”.
