Solid business case fits in with ambitious financier

Beequip Equipment Finance takes a slightly different approach to financing than traditional banks, which was precisely what the BECC Energy Hub needed to invest in battery storage.
"Equipment first is our main starting point," says lease officer Ricardo Huisden. The leasing company takes ownership of the equipment, just like a lease car for employees, and the user pays a monthly installment as repayment. Could this also be done with a battery that is much larger than other energy storage in the financier's portfolio? Huisden: "It's a fairly new product, so historical data won't get you there. But it is not our first battery; we have about 125 in our portfolio at the beginning of 2023. We know the suppliers such as Alfen, the market leader in the Netherlands and a great partner. We know that BECC has the sufficient cash flow to meet the monthly installments. It was exciting, but we were able to close a good deal with a solid business case."

Kevin van 't Oor, a specialist in marketing and communication, adds: "Beequip first looks at the material: is it current, do we have sufficient knowledge of it and suppose things go wrong, is there a sales channel? We look at a company's books somewhat less than banks, but that requires in-depth knowledge of the material. And we have experts like my colleague Ricardo for that."

See the need in time

Beequip began in 2015 in an attic room, and eight years later has more than 120 employees and 4,000 customers. Two billion euros in lease contracts have been issued. In addition to the portfolio, the number of markets in which the financier operates is also growing. Financing heavy equipment (used and new) for the construction, infrastructure, and logistics also brings Beequip into inland shipping, the agricultural sector, and recycling. In addition, international customers in Europe and the United States are rising.

"We did our first battery deal in 2021," Huisden says. "That was with a landlord who saw the need for mobile electrical energy for generators at events and in construction, locations where a diesel generator is not always desirable."

Legislation and regulations are driving the switch to electric propulsion, an important stimulus for the growth of Beequip. The financier focuses on small and medium-sized enterprises, which, like BECC, can choose the equipment to be used. Leasing means more financial scope for small and medium-sized businesses, which don't need to commit as much capital to equipment.

Promising plans

The money Beequip uses for the lease comes from investment bank NIBC, Beequip's strategic partner since 2016. NIBC has also been an investor in BECC since the restart of the power plant in Cuijk.

"BECC's plans from 2015 made a good contribution to the environmental goals of the time," says NIBC managing director Frans van der Harst. "A stationary plant could once again produce green electricity using prunings from the surrounding area. In addition, there were promising plans to expand with an industrial heating network, which has now been realized. However, the battery had not yet been invented at the time."

He says expectations were met in 2023 thanks to knowledgeable management responding to new developments. Van der Harst: "The management knows how a plant works, they understand the market for prunings, and know the rules of the environmental regulations. Practical knowledge is essential."

At NIBC's investment branch, the energy transition is one of the themes in which investments are made. "We have several companies in our portfolio that pursue similar goals as BECC. For example, we also invest in bio-LNG for trucks, making homes more sustainable and services for wind farms. These are investments in the transition to the new economy."

NIBC is proud of the bank's contribution, says Van der Harst.

Such a battery is very important for balancing the electricity grid, which is one of the challenges of the energy transition. BECC is perhaps the first to install this on such a scale at a power plant.

Frans van der Harst, managing director NIBC

Hydrogen in sight

Without the combined support of Beequip and NIBC, upgrading BECC to Energy Hub would have been more complicated, Huisden thinks. "For us, this equipment is a solid business case. It is custom work, but in the unlikely event that something goes wrong, we can deploy the modules elsewhere. Traditional financiers of small and medium-sized enterprises do not have that knowledge, so they have to demand other securities such as real estate or the pledging of stocks."

The term "stick to what you know" also applies to Beequip, which is why they ignored the financing of the e-boiler: "We know too little about that, and then we should look at it like a bank. We only want to do what we are good at."

At the same time, Beequip is looking at energy sources still under development, such as hydrogen. Van 't Oor: "At TU Delft, we are in contact with both the electrical and the hydrogen teams and can commit to them."

Huisden: " At times, it almost seems like football rivals Feyenoord and Ajax, but we think we need both. Hydrogen and electricity both have limitations and advantages. Beequip only offers battery solutions, but we are discussing hydrogen-based vehicles and generator sets. These are still prototypes and test setups, but we will join in as soon as a product comes onto the market in series."