Investing in the energy transition

Adaptogen Capital was founded in 2020 to provide investors with the expertise and support needed to navigate the energy transition. They launched Adaptogen Battery Storage LP (The Fund) in 2021 and subsequently invested into Varco Energy Limited, an operating company platform, to develop and own Battery Energy Storage Systems (BESS) in the UK and Irish markets.  

Varco Energy has a construction pipeline of BESS assets in the UK, including the Native River project, a 57MW 2.4-hour transmission connected BESS south of Liverpool, and the Sizing John project, a 57MW 2.4-hour transmission connected BESS south of St Helens. BESS are critical infrastructure to help balance the intermittent nature of renewable energy generation and break the UK’s reliance on fossil fuels. 

NatWest agrees £58m of facilities to help Adaptogen deliver its project pipeline

Varco Energy approached NatWest, which has arranged, structured and advised on multiple financings in the BESS sector to help with the funding of their Native River and Sizing John BESS projects, which are both forecast to be operational in the last quarter of 2024. 

Based on discussions with the Varco Energy team and a detailed analysis of their funding requirements and forecast revenue streams, NatWest agreed to provide, as sole lender, a £50 million capex facility, as well as an £8 million VAT facility, and an interest rate hedging facility. 

Supporting BESS sector aligns with NatWest’s purpose to help with the UK’s green transition

James Mills, Managing Director of Adaptogen Capital, commented: “The provision of flexible and specialist capital is essential to successfully decarbonise our economy and create a more sustainable future. NatWest’s financing package enables us to deliver our first utility scale battery-based energy storage systems. We are excited to have secured this initial facility with one of the leaders in the specialist BESS financing market, are grateful to NatWest for their funding support, and look forward to working together to help build out our remaining pipeline.”

Jacob Lloyd, Head of Specialist Asset Finance at NatWest, said: “As the UK continues to transition to a net zero energy system, the BESS market continues to play an important part in balancing grid instability. To that extent we are delighted to support Varco Energy with their new BESS projects in the UK, providing a further 114MWs of energy to keep moving towards a renewable future. NatWest continues to build on its support to the BESS sector, aligning to our commitment to provide £100bn of climate and sustainable funding by 2025.”

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