Byhmgard signs loan agreement with Signet Bank for the financing of the SW Power battery storage plant in Rīga, 15 MW / 30 MWh
Byhmgard signs loan agreement with Signet Bank for the financing of the SW Power battery storage plant in Rīga, 15 MW / 30 MWh
Byhmgard AB (publ) ("Byhmgard" or the "Company") announces that its wholly owned project company SW Power SIA (the "Project Company") has signed a loan agreement with Signet Bank AS for a project loan of just over EUR 3.0 million, corresponding to 50 percent of the financing of the Company's battery storage plant at Ata iela in Rīga, Latvia (the "Plant"). The total financing requirement for the Plant amounts to approximately EUR 6.1 million (approximately SEK 67 million). The remaining 50 percent is intended to be financed largely through the Company's wholly owned subsidiary Byhmgard Invest AB, which in turn owns all shares in the Project Company, acquiring battery systems on a payment plan and contributing them to the Project Company as a contribution in kind. This credit is guaranteed with support from the financing agreement with Middelborg AS and Gimle Invest AS announced by the Company on 11 March 2026. The loan from Signet Bank is sized to be serviced by the group's revenue from energy arbitrage, which the Company estimates at approximately EUR 20 million over 20 years, with a further potential of approximately EUR 33 million from balancing and capacity services to the state-owned transmission system operator Augstsprieguma tīkls (AST). As previously announced, commercial operation is planned for the second quarter of 2027.
Financing
The financing requirement of approximately EUR 6.1 million is financed half by a project loan from Signet Bank AS, Rīga, secured on the Plant and the Project Company. The loan is disbursed against costs incurred during construction and is repaid monthly from autumn 2027. The other half is intended to be financed through the Company's subsidiary Byhmgard Invest AB, which in turn owns all shares in the Project Company, acquiring battery systems on credit and contributing them to the Project Company as a contribution in kind. The battery systems make up most of the portion of financing provided by Byhmgard Invest AB, and the balance, approximately 30 percent, is contributed in cash by Byhmgard Invest AB. The credit for Byhmgard Invest AB's acquisition of the battery systems is supported by guarantees from Middelborg AS and Gimle Invest AS in accordance with the financing agreement announced on 11 March 2026, under which these parties undertake to cover the part of the project cost not financed by bank debt.
The financing of the Company's second plant in Rīga, SW Battery SIA, is being finalised and is intended to follow the same structure.
Revenue calculation
The loan from Signet Bank is sized on estimated revenue from energy arbitrage, that is trading on the Nord Pool day-ahead and intraday markets. According to the Company's revenue analysis, the Plant is estimated to generate revenue of approximately EUR 20 million over the period 2027 to 2047, which meets the bank's coverage requirement for interest and repayments. The Company's revenue analysis is based on historical price spreads on the Nord Pool day-ahead market for Latvia, one full charging cycle per day, assumptions on efficiency, degradation and availability, and an assumed price development over the period. Once the Plant has been approved for balancing and capacity services with the state-owned transmission system operator in Latvia (AST), further revenue of approximately EUR 33 million is estimated based on external market assessments that Byhmgard has requested from local third-party market participants. These calculations indicate total revenue of approximately EUR 53 million for the period 2027 to 2047 in the electricity, balancing and capacity markets. Any revenue from balancing and capacity services is, however, not necessary for the payment of interest and repayments on the loan. Estimated revenue varies with price spreads in the electricity market and in the balancing and capacity markets, and the actual outcome is expected to fall within the range of EUR 20 million to EUR 53 million. All amounts are estimated revenue before operating costs.
The plant and timeline
The Project Company is wholly owned by Byhmgard through its subsidiary Byhmgard Invest AB. The Plant has a grid connection of 14.99 MW and consists of six liquid-cooled lithium iron phosphate (LFP) battery containers with two hours of storage, approximately 30 MWh. Land rights and the environmental decision have been obtained, and the grid connection agreement has been entered into. As previously announced, the Project Company has signed an EPC agreement with Latvijas Energoceltnieks (LEC) and an operation and maintenance agreement with Alstra Energy AB. LEC will only commence its work under the EPC agreement after Byhmgard issues a notice to proceed. Notice to proceed to LEC is issued when the building permit is registered with the relevant authority in Rīga. The building permit is expected to be obtained in mid-November 2026. Costs for LEC's work, approximately EUR 0.6 million, begin to accrue when the notice to proceed is issued and are included in the total investment of approximately EUR 6.1 million. Costs for Alstra Energy AB's work, approximately EUR 70 thousand per year, begin to accrue once operation has commenced and are included in the Plant's operating costs. Delivery of the battery systems to Rīga is expected in spring 2027 and commercial operation in the second quarter of 2027. An application for approval for ancillary services is planned to be submitted thereafter.
CEO comment
"The loan agreement is a decisive step in the financing of our first own plant, and we are closer to our goal of moving from delivering battery systems to owning and operating them. The loan is sized on estimated revenue from energy arbitrage, which gives a robust base, while potential ancillary services to AST may provide a substantial upside. The structure with a project loan and guaranteed acquisitions on credit of battery systems contributed to our project companies as equity is built to be repeated, and the next plant follows the same model," says Christian Byhmer, CEO of Byhmgard.
Signet comments
“We are pleased to support the development of Byhmgard first battery energy storage facility in Riga, providing financing that will help the company achieve its growth ambitions while contributing to the modernization of Latvia's energy infrastructure. As significant investments in renewable energy generation continue, there is a growing need to expand energy storage capabilities and grid balancing capacity. The energy sector is experiencing rapid growth both globally and in Latvia, and we are encouraged to see experienced international investors like Byhmgard investing in Latvia's energy market. Signet Bank sees strong potential in the energy sector and intends to continue supporting its development through financing," säger Ineta Done, Member of the Management Board of Signet Bank
Forward-looking statements
This press release contains forward-looking statements that reflect the Company's current view of future events and financial and operational performance. Such statements are based on assumptions and are subject to risks and uncertainties, including permitting, construction, grid connection, market prices and financing, and actual outcomes may differ materially. The Company undertakes no obligation to update forward-looking statements other than as required by law or NGM Nordic Growth Markets' rule book.