24.09.2026
The ability of an energy storage project to secure bank financing depends on more than its projected payback period. A bank assesses the competence of the project team, the resilience of the financial model under different scenarios, the commissioning schedule, the investor’s equity contribution, available collateral and the presence of alternative cash flows. Pavlo Prytyko, Director of the Department for Medium-Sized Corporate Clients at PUMB, discussed these requirements during the Energy Club forum “Energy Freedom: Resilience and New Opportunities in Ukraine’s Energy Storage Market,” held in Kyiv on 17 September.
Pavlo Prytyko presented a banking perspective on the current state, prospects and risks of the energy storage market. According to him, the energy sector has already become one of the main areas requiring and attracting significant investment.
The war has considerably accelerated the need to rebuild Ukraine’s power system. This process will continue over the coming years, with energy storage systems becoming one of the elements of a new and more resilient model. “We understand that the energy sector will undergo a systemic transformation over the next several years and that the volume of investment that needs to be made today is considerable. The energy system of the future is moving towards the models used in developed Western countries, including the application of energy storage systems,” Pavlo Prytyko said.
At the same time, the Ukrainian market is only beginning to accumulate operational data on such facilities. Banks, investors and technical advisers do not yet have ten or fifteen years of experience showing how specific business models perform over the full life cycle of the equipment. “We do not yet have experience demonstrating how these business models actually perform over ten or fifteen years from technical, engineering and financial perspectives. We are only beginning to accumulate the relevant statistics and discuss them within the professional community,” the PUMB representative explained.
The first question for the bank is who will implement the project. A BESS project is both technically and financially complex, so the bank needs to understand whether the project sponsor, its partners and contractors are capable of bringing the facility into operation and managing it afterwards. “First and foremost, the bank needs to understand how well the company and its partners know the project, and how thoroughly they have studied its business model, risks and potential pitfalls,” Pavlo Prytyko emphasised.
He advised investors to analyse every aspect of the project in detail at the initial stage and to involve specialised technical and energy experts. When reviewing loan applications, PUMB also consults companies that help the bank assess the technical aspects of energy projects. “Our recommendation is to examine all aspects of the project and consult experts during the initial assessment stage. Professional technical and analytical information is an important part of the bank’s decision-making process,” he said.
The next fundamental element is a detailed financial plan and cash-flow forecast. Projects relying primarily on price arbitrage are particularly difficult to assess.
The key input in such a model is the future price of electricity. However, the Ukrainian market remains volatile, and electricity prices are influenced by numerous factors. This makes them difficult to forecast not only several years ahead, but even for the next few months or days. “The project is financially complex because its key input is the future price of electricity. For companies implementing arbitrage-based projects, forecasting that price is extremely difficult,” Pavlo Prytyko explained.
A bank therefore cannot assess a project using only one base-case forecast. It must determine whether the borrower will still be able to service the loan if electricity prices, the availability of electricity for charging the storage system or demand for its services change. “When we analyse the resilience of these projects, we conduct not one or two, but six or seven — and sometimes as many as ten — stress tests. They cover different scenarios for the availability of electricity to charge the system, demand and price,” the PUMB representative said.
The results of this analysis answer the lender’s central question: whether the project is bankable and whether it can remain financially resilient under adverse conditions.
Conventional investment risks also play an important role. One of these is compliance with the construction and commissioning schedule. Even a technically sound project may lose part of its anticipated revenue if its launch is delayed. “The timing of the investment’s transition into operation is extremely important to the project’s resilience. Delaying the commissioning date has a significantly negative effect on its cash flows,” Pavlo Prytyko stressed.
The bank also expects the investor to assume part of the financial risk and contribute its own capital to the project. “The bank will go through the entire implementation process together with the investor or entrepreneur. This means that the bank expects an equity contribution from the partner, because the risks must be shared between the investor and the financing institution,” he explained.
War-risk coverage remains a separate factor. This issue is important both for the project owner, whose invested capital is at risk, and for the bank providing the loan. “War-risk insurance remains an open question for every market participant. It is important for the investor committing its own funds and for the bank participating in the project alongside the investor,” Pavlo Prytyko said.
During the investment stage, while the energy storage system is still under construction and is not yet generating its own revenue, the likelihood of financing approval increases considerably if the borrower can provide alternative collateral.
It is also important to have an existing cash flow from another business activity capable of covering at least the interest payments on the loan until the BESS facility begins operating. “During the construction stage, it is desirable to have alternative collateral and an additional cash flow capable of supporting the project and servicing interest payments on the loan,” the PUMB representative explained.
For electricity-arbitrage projects, the bank also prefers to see support from an alternative business model throughout the storage facility’s operating period. This reduces the borrower’s dependence on fluctuations in a single market segment.
Projects in which an energy storage system is installed for the needs of an operating company and combines self-consumption with arbitrage are assessed differently. In this case, the financial benefit comes not only from direct income earned through electricity market operations, but also from savings, backup power and support for the company’s core business. “Projects intended for self-consumption and additionally combined with arbitrage have a different risk structure. Their resilience and payback are also supported by the company’s core operating business model,” Pavlo Prytyko concluded.
