A grid-scale battery project is a power plant wrapped in roughly ten contracts, and the contracts are where projects actually succeed or die. The physical plant is increasingly a commodity; the agreement stack — who takes which risk, for how long, backed by whose balance sheet — is what a lender prices and what an investment committee actually approves. Here is the whole stack on one page: what each agreement does, who signs it, when it lands, and the one thing worth watching in each.
One shape to hold first: nearly every line below has the same party on one side — the project company, a special-purpose vehicle that owns nothing but this plant and these contracts. That is deliberate. Lenders financing on a non-recourse basis want a borrower whose entire world they can read: every obligation the project has is in this stack, and nothing outside it can reach in.
The map
| Agreement | Acronym | Counterparty | What it does |
|---|---|---|---|
| Financing Agreement | FA | Lenders, equity investors | The overarching money document: contributions, drawdowns, distributions, default and repayment order |
| Equity Capital Contribution Agreement | ECCA | Tax-equity investor | Commits tax-equity funding once the plant is built and conditions are met (US structure) |
| Land Lease / Purchase Option | — | Landowner | Holds the site cheaply through development; converts to a full lease or purchase at financial close |
| Interconnection Agreement | IA | Utility / ISO / RTO | The right to connect: studies, network upgrades, cost responsibility, milestone schedule |
| Battery Energy Supply Agreement | BESA / BSA | Battery OEM / integrator | Supply, delivery, testing and commissioning of the battery system, with its warranties |
| Engineering, Procurement & Construction | EPC / BoP | EPC or BoP contractor | Designs and builds the plant, from notice to proceed through substantial completion and COD |
| Long-Term Service Agreement | LTSA | Battery OEM / integrator | Maintenance of the battery through its life, carrying the degradation, RTE and availability guarantees |
| Operations & Maintenance Agreement | OMA | O&M provider | Operates and maintains the site — typically everything outside the battery itself |
| Offtake Agreement | — | Offtaker | Sells the battery’s services for a defined term — the revenue the whole financing stands on |
| Hedge Agreement | — | Financial counterparty | Caps merchant exposure contractually — insurance-shaped, not a sale of services |
The money: FA and ECCA
The financing agreement is the constitution of the project: it governs how debt and equity money comes in, how construction drawdowns are released, how cash flows out once the plant earns, and — the part everyone hopes never to read again — what happens on default, in what order the parties get repaid. It is also where the lenders’ independent engineer gets written into the project’s life: drawdowns and completion milestones are certified, not self-declared.
The ECCA is the US tax-equity variant of the equity leg: an investor commits capital in exchange for the project’s tax benefits, funding only once the plant exists and defined conditions are met. Worth knowing in 2026: since standalone storage earned its own investment tax credit and credits became transferable, many owners simply sell the credits rather than build a full tax-equity partnership — the ECCA is one door into the tax benefits, no longer the only one.
The site and the grid: land and the IA
Land runs on a two-stage trick: through development the project holds only an option — a cheap right to lease or buy — because most projects die before they need land, and paying for acreage a permit might kill is capital wasted. At financial close the option converts into the real lease or purchase. The diligence point is the tail: an option that expires mid-financing, or a lease shorter than the debt, is a ready-to-build checklist item quietly failing.
The interconnection agreement is the contract behind the queue years: it grants the right to connect, records what the studies concluded, assigns the network-upgrade bill, and sets a milestone schedule with money attached. It is the agreement most capable of killing a project singlehandedly — an upgrade assignment can rival the equipment cost — which is why the development article treats interconnection as the long pole of the whole schedule.
The build: BESA, EPC, LTSA
Three contracts deliver the plant, and how they divide is the wrap vs split decision that the procurement deep dive covers clause by clause. In brief: the BESA (also written BSA) buys the battery system itself — supply, delivery, testing, commissioning, and the warranty and performance-guarantee package; the EPC or balance-of-plant contract designs and builds everything from limited notice to proceed through substantial completion and COD, with the bonding, retention and termination machinery construction contracts always carry; and the LTSA binds the battery supplier for the years after, carrying the long-term performance guarantees — degradation, round-trip efficiency, availability — that the warranty alone doesn’t.
The watch-item is not any single contract but the seams between them. In a split structure the owner holds the interfaces: when a capacity test fails, the battery OEM, the PCS supplier and the EPC each point at the other two, and the interface matrix — which contract owns which failure — becomes the most-read document on the project.
Operating: the OMA, and where the LTSA ends
The O&M agreement puts an operator on everything the LTSA doesn’t cover — typically the whole site outside the battery: switchgear, transformers, site systems, monitoring, mowing the grass under the containers. The practical teaching is boundary-drawing: augmentation cranes, HVAC on the enclosures, firmware updates that touch both battery and plant controls — every ambiguous item should be in exactly one scope. A gap means nobody maintains it; an overlap means two invoices and one argument.
The revenue: offtake and hedge
The offtake agreement sells what the battery does — capacity, tolling rights, a contracted revenue floor — to a creditworthy counterparty for a defined term, and it is the cornerstone of the financing in the most literal sense: the debt is sized against it. Its shapes and trade-offs are the subject of the revenue-streams article; the stack-level points are its term (offtake that expires before the debt leaves a refinancing bet inside the model), its counterparty (a floor from a thin counterparty is not a floor), and its performance obligations, which quietly reach backward into the LTSA’s guarantees — you can only sell the availability your service contract actually secures.
A hedge agreement is the financial sibling: no services change hands; a financial counterparty absorbs a slice of merchant risk by contract, insurance-shaped. Hedges make thin offtake stacks financeable — and the standing caution from the development article applies: be wariest of a merchant case propped up by hedges that expire long before the debt does.
When each one lands
The stack assembles in rough order: land option and interconnection application first (development is mostly these two aging), then offtake in the narrow window where the project is de-risked enough to sign but not yet at final investment decision, then the build contracts and the money documents converging at financial close — the day the FA executes, the land option converts, the first drawdown is unlocked, and the EPC gets its notice to proceed. From there the contracts hand off to each other: EPC and BESA govern until COD, then the LTSA, OMA and offtake take over for the twenty years that follow. If that closing sequence reads like the ready-to-build checklist plus money — that is exactly what it is: lenders’ conditions precedent and the RTB items are largely the same list, verified rather than promised.
For where the lifecycle’s gates fall — and which agreement closes each stage — see the project development hub.
FAQ
What contracts does a grid-scale BESS project need? Roughly ten: a financing agreement and usually a tax-equity ECCA on the money side; land and an interconnection agreement for the site and the grid; a battery supply agreement, an EPC or balance-of-plant contract, and a long-term service agreement for the build; an O&M agreement for operations; and an offtake agreement — often with a hedge — for revenue. All of them point at one project company.
What is an ECCA in a BESS project? An equity capital contribution agreement — the contract under which a tax-equity investor commits to fund the project company once it is built and defined conditions are met. A US structure built around storage tax credits; since transferability arrived, selling credits outright is the common alternative to classic tax equity.
What is the difference between an LTSA and an O&M agreement? The LTSA binds the battery supplier to maintain its own equipment and stand behind long-term performance guarantees — degradation, round-trip efficiency, availability. The O&M agreement covers operating everything else on the site. The seam between them is where disputes grow, so the scope split deserves as much attention as either contract alone.
Which BESS agreement matters most to lenders? The offtake agreement. It is the revenue the debt is sized against, which is why it is often called the cornerstone of the financing — and why its term, its counterparty credit, and what happens when it expires before the debt does get more lender attention than any technical document.
The contract stack, warranty mechanics, and how lenders actually read these documents — covered in depth in my Grid-Scale BESS: Complete Guide.