Osborne Clarke advises terralayr on EUR 60 million portfolio financing for battery storage in Germany

Osborne Clarke has provided legal advice to terralayr, a provider of energy flexibility with a focus on battery storage in Germany, on a portfolio financing with a total volume of EUR 60 million. The financing serves the implementation of a portfolio of nine front‑of‑the‑meter battery storage projects with a total capacity of 112 MW / 238 MWh in the TenneT control area and additionally includes an accordion facility of EUR 100 million for the financing of further projects from terralayr’s pipeline. ABN AMRO and Commerzbank acted as Mandated Lead Arrangers and Original Lenders in the transaction, which represents terralayr’s largest debt financing to date.

The transaction centres on a structured combination of a seven-year tolling agreement with Vattenfall for 55 MW and the marketing of the remaining 57 MW via terralayr's proprietary LAYR platform. The LAYR flexibility-as-a-service offering virtualises battery storage flexibility, enables participation in ancillary service markets, wholesale electricity markets and virtual battery auctions (VBAs), and supports a multi-optimizer model. The construction and operation of the projects are secured through turnkey EPC contracts and long-term O&M agreements with several established EPC providers.

Osborne Clarke advises terralayr on an ongoing basis and was also involved in drafting the project and tolling agreements for the financed portfolio. During the transaction, Osborne Clarke acted as Borrower Legal Due Diligence Provider, and its bankability assessment formed the basis for the financing documentation of the participating banks.

“Reaching financial close on this financing is a significant milestone for terralayr. It demonstrates that diversified portfolio-based battery storage projects with a balanced revenue profile are bankable in Germany. The close, highly pragmatic collaboration with Osborne Clarke – on the legal due diligence and the structuring of the project and offtake agreements – was a key factor in successfully implementing this complex project in a challenging market environment and providing the banks with the necessary comfort. Osborne Clarke is able to align regulatory, technical and financing requirements and translate them into a scalable set‑up,” says Philipp Man, Co‑Founder and CEO of terralayr.

“This portfolio financing, which is unique to date in the German battery market, shows how large‑scale battery storage portfolios can be successfully structured on a market basis and without traditional support mechanisms,” adds Dr Daniel Breuer, Head of the Energy & Energy Transition sector at Osborne Clarke. “What is particularly exciting about this transaction is the combination of flexible portfolio financing with a virtual tolling model via LAYR, which ideally combines contracted revenues and access to merchant revenues, without being tied to one individual asset. A smart way to bringing together portfolio effects, diversification and platform-based marketing – a scalable model for further battery storage financings in the German and European markets.”

The Osborne Clarke team advising terralayr under the joint lead of Dr Daniel Breuer (lead Partner), Dr Marleen Rheker and Dr David Langenbach (both co‑leads, all Energy) consisted of Anna von Bremen and Rahel Brockmann (both Route‑to‑Market/Tolling), Dr Thies Goldner and Anne Müller (both Corporate), Bineta Diambang and Friedrich Polzin (Real Estate), Dr Karla Klasen, Veronika Thalhammer and Dr Maria Batyreva (all Energy/Project Agreements), Natalie Kopplow, Tim Schultze and Dr Maximilian Orthmann (all Permits), Olexiy Oleshchuk, Andreas Baumann and Arsen Dutka (all Finance), as well as Konrad Teßmar (Legal Project Management).