Shinhan Financial Group will install a large-scale energy storage system (ESS) in the UK. in collaboration with Korean power equipment companies such as Samsung SDI Co. and LS Electric Co., the first time a Korean financial institution formed a project fund (PF) to undertake overseas ESS projects.

According to sources on Monday, Shinhan Financial Group, alongside Samsung SDI and LS Electric, plans to install a high-capacity ESS in the Botley region of the UK. To finance this project, Shinhan Financial Group will establish a dedicated fund with an amount of $68.7 million. The fund will serve as the financial foundation for Samsung SDI and LS Electric to handle equipment procurement and construction, respectively.

By entrusting Korean companies with key roles in the project, Shinhan Financial Group aims to generate significant investment returns while contributing to the growth of domestic companies by bolstering their sales and expertise, said an investment banking source familiar with the transaction.

The ESS project will boast a power capacity of 50 megawatt or 114 megawatt hour. This system will have the capability to cover the electricity needs of about 114,000 households. The chosen installation site is an expansive area spanning approximately 165,000 square meters, located some 100 kilometers south of London in the Botley region. The UK has demonstrated its commitment to renewable energy, with renewable sources accounting for 38 percent of the total energy generation as of 2020.

Shinhan Asset Management under Shinhan Financial Group will assume the crucial role of general partner (GP) in establishing the dedicated fund. Several subsidiaries of Shinhan Financial Group, along with two other financial institutions, will participate as limited partners (LP). Samsung SDI will play a role as an equipment supplier for the project. Leveraging its extensive experience and knowledge gained from over a decade of pursuing lithium-ion ESS projects since 2010, Samsung SDI is well-positioned to deliver top-quality systems. LS Electric is responsible for the construction.

ESS provides a reliable and sustainable solution to address the fluctuating nature of renewable energy sources like wind and solar power. It has emerged as a crucial component of the global energy landscape, enabling the efficient utilization and management of electricity produced by renewable energy sources.

This pioneering project by Shinhan Financial Group is part of a larger strategic vision to expand its investment in overseas eco-friendly energy business through collaboration with domestic companies. The group plans to embark on its second and third ESS projects in the UK during the second half of this year. Beyond ESS ventures, Shinhan Financial Group envisions continued investments in renewable energy projects across various locations worldwide.

By Park Chang-young and Minu Kim

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