Herbert Smith Freehills advises syndicate of banks on first-of-its-kind portfolio financing of battery energy storage system

Herbert Smith Freehills has advised The Hongkong and Shanghai Banking Corporation Limited (HSBC) and Cathay United Bank Co., Ltd. on the NTD1,400,000,000 financing of an approximately 50MW portfolio of battery energy storage system (BESS) units to be developed by Iontree Co., Ltd (a joint venture between Hartree Partners Singapore Pte. Ltd. (a subsidiary of Hartree Partners, LP and an active developer of BESS assets globally) and SIC (a Taiwanese company active in solar development) in Taiwan. 

It is the first stand-alone battery storage project in Taiwan that is not linked to a power generation plant.  The financing, which closed in December 2022 is a first-of-its-kind portfolio financing in Taiwan and features flexibility to support the development of additional BESS units. It recently won Battery Deal of the Year in the PFI Asia-Pacific Awards 2022.

The transaction was led by partner Andrew McLean and senior associate Aaron Chiong with support from senior associate Kai Low and solicitor Adam Tucker. Hong Kong-based partner Alexander Aitken and associate Leo Wong provided jurisdictional support to the Perth-based core team. Herbert Smith Freehills’ alliance firm Prolegis advised on Singapore law aspects of the transaction whilst Tsar & Tsai acted as Taiwan law counsel to the lenders.

Lead partner Andrew McLean commented, “We are delighted to have supported HSBC and Cathay United Bank on this exciting and important project in Taiwan. This project is a clear indication of the rapidly increasing inbound investment interest into the Taiwan renewables market due to Taiwan’s green energy transition and we are thrilled to be at the forefront of that movement.”

Lead senior associate Aaron Chiong said: “The team at HSBC, Cathay United Bank and Iontree, along with all advisers, have worked tirelessly to reach financial close on this financing and to have reached this important milestone is a testament to the effort and the hard work of all parties involved.  A well-deserved congratulations to all.”

Energy storage will become a critical part of Taiwan’s transition to green energy, particularly as the renewable sectors develop. Taiwan aims to have renewable energy constitute 20% of its energy mix by 2025, with a total of 590MW of battery storage by 2025.

The deal is another example of Herbert Smith Freehills’ market-leading work in renewables assets in Asia, particularly in Taiwan, a recent example being the firm's work advising Swancor Renewable Energy on its offshore wind farm projects Formosa 4 and Formosa 5 in Taiwan.