A new institutional financing category

Finance the batteries Europe needs.

Battery-Backed Securities transform diversified cash flows from operating energy-storage assets into transparent, investable notes — while keeping construction, merchant and early technology risk away from senior pension capital.

Download the BBS proposal Explore the structure Discuss BBS with Stefan

An initiative byStefan Nolte, MACo-Founder & CFO, SALZSTROM

Proposal stage · Not an offer of securities

Operating battery assetsVerified, contracted, monitored
Bankruptcy-remote BBS vehicleOne pool, one waterfall
Transparent notesFor institutional investors

Thesis

Securitisation is not the problem. Unstructured risk is.

The financial crisis demonstrated what happens when weak assets, misaligned incentives, opaque data, excessive leverage and unnecessary complexity are bundled together.

BBS applies the opposite design logic to productive energy infrastructure: identifiable operating assets, standardised contracts, continuous performance data, sponsor risk retention and a simple cash-flow waterfall.

The lesson of 2008 is not ‘never securitise’. It is ‘never securitise what investors cannot understand’.
BBS design principle

What failed / How BBS responds
What failed	How BBS responds
Opaque mortgage pools	Visible operating battery assets
Originate and distribute	Sponsor retains meaningful first loss
Weak underwriting	Strict asset eligibility and independent verification
Static assumptions	Continuous EMS and operating data
Complex re-securitisation	One pool and one transparent waterfall
Hidden leverage	Disclosed credit enhancement and amortisation

Not every asset-backed security failed in 2008. The structures that did shared the pattern on the left. BBS is designed from the pattern on the right.

Three questions. Three answers.

Why securitisation again?

Because pooling is a neutral financing mechanism. The failures of 2008 came from poor underwriting, opacity, leverage and misaligned incentives. BBS is designed around visible operating assets, retained sponsor risk and continuous performance data.

More detailLess detail

The Financial Crisis Inquiry Commission concluded that “no one in this pipeline of toxic mortgages had enough skin in the game”. EU law has since made risk retention, transparency, credit-granting standards and investor due diligence mandatory for every securitisation. BBS is designed to exceed those minimums rather than merely comply with them.

What makes BBS investable?

Only qualifying operating assets enter the senior pool. Contracted or appropriately floored revenues support debt service. Construction risk, unbounded merchant exposure and early technology risk remain outside senior pension notes.

More detailLess detail

Senior debt service is sized on contracted, availability-based, tolling or floored revenues. Merchant upside is excluded from the base case or heavily haircut and treated as credit enhancement. Funded reserves, performance triggers and scheduled amortisation protect senior investors when assets underperform.

Why sodium-ion?

Because financing standards influence which technologies scale. Sodium-ion can diversify battery supply chains and is particularly relevant for stationary storage, where energy density is less decisive. Early sodium-specific risk must, however, remain with sponsors, OEMs, warranties, reserves or subordinated capital.

More detailLess detail

A lithium-only eligibility framework would tie Europe’s storage refinancing channel to a single, concentrated supply chain for a decade or more. BBS proposes a phased, evidence-based pathway in which sodium-ion assets earn senior eligibility as operating history, independent testing and warranty coverage accumulate.

Security architecture

The security is the solution.

BBS makes risk visible, allocates it deliberately and gives each investor only the risk it is equipped to hold.

Asset side

A diversified pool of qualifying operating BESS assets

Contracted or floored revenues
Verified commissioning
Operating history
Independent technical data
Assignable cash-flow rights
OEM warranties
Defined O&M arrangements
Geographic and counterparty diversification

Bankruptcy-remote BBS SPV

One pool. One waterfall. Independent oversight.

True-sale or legally validated transfer
Independent servicer
Backup servicer
Data verification
Security trustee
Reserve accounts
Performance triggers
Cash-flow waterfall

Capital structure

Illustrative allocation — not a completed transaction

Class A approx. 60–75%

Senior institutional notes

Audience: Pension funds
Insurers
Long-term fixed-income investors
Risk: Contracted and monitored operating cash flow

Class B approx. 10–20%

Infrastructure credit

Audience: Banks
Credit funds
Infrastructure-debt investors
Risk: Greater operating and revenue volatility

Sodium or technology protection approx. 5–10%

Alternative mechanisms, not automatically a separate class

Mechanisms: Dedicated sodium series
OEM support
Technology reserve
Performance warranty
Sponsor retention
Junior technology layer
Risk: Early, technology-specific performance risk

Sponsor residual approx. 10% or more, as required by credit analysis

Retained by the originator

Function: First loss
Risk retention
Incentive alignment
Risk: Absorbs losses first

Illustrative percentages. Final sizing depends on asset pipeline, contracts, legal analysis, rating feedback and investor demand.

Cash-flow waterfall

Simplified priority of payments

Essential operating and SPV costs
Senior transaction expenses
Class A interest
Class A principal
Reserve replenishment
Class B interest and principal
Technology-support requirements
Sponsor residual

Performance triggers, cash sweeps and early-amortisation events protect senior investors when assets, revenues or reserves underperform.

Outcomes

What each party receives — and what it does not.

Investor

A diversified, monitored and amortising fixed-income exposure backed by operating infrastructure.

Grid

Dispatchable flexibility that supports renewable integration, congestion management and system resilience.

Government

A mechanism to mobilise institutional capital while limiting public support to clearly defined market-creation risks.

No party receives guaranteed returns, guaranteed stability or unlimited leverage of public funds.

Safeguards

Catalytic, limited and conditional.

Public capital has a role in creating a first market — not in carrying its commercial risk.

Government may potentially support the first programme through

An anchor investment
A capped guarantee
A super-senior tail-risk facility
A temporary liquidity facility
Standardisation and transaction-development support

Government should not

Buy predictable first loss
Replace sponsor capital
Guarantee merchant speculation
Support construction-stage assets in senior notes
Protect weak underwriting
Remove investor due diligence
Provide permanent subsidies

Public support should solve a first-market coordination problem — not socialise commercial losses.

What enters the senior pool?

Qualifying assets should normally have:

Completed construction
Successful commissioning
Verified grid connection
Defined operating history
Enforceable revenue contracts
Assignable cash-flow rights
Reliable EMS data
Appropriate insurance
OEM and system warranties
Defined maintenance arrangements
No unresolved material defects
Compliance with applicable safety and grid requirements

What stays outside?

Construction risk
Unbounded merchant exposure
Unsupported residual-value assumptions
Unverified technology claims
Assets without reliable data
Weak or non-assignable contracts

Sodium-ion

Do not let today’s financing standards lock in yesterday’s chemistry.

Abundant

Sodium is abundant and widely distributed. Sodium-ion chemistries can reduce dependence on lithium-centred supply chains, although individual designs still use other materials whose criticality varies.

Suited to stationary storage

Stationary storage is a natural entry market because energy density is usually less decisive than in vehicles. Cycle life, safety behaviour, cost and supply security matter more.

Strategic, not yet cost-leading

Sodium-ion has strategic cost and supply-chain potential. Cost potential is not the same as present cost leadership: sodium-ion is not yet cheaper than mature LFP, and the JRC reports an average 2024 sodium-ion cell cost of about USD 87/kWh with declines projected as production matures.

Maturity varies

Technology maturity varies materially by supplier and chemistry. Safety, degradation and warranty claims must be assessed per product, not per category.

Pension note = contracted and monitored cash flow. Sodium-specific early risk = sponsor and OEM support, warranties, reserves or subordinated capital.

A phased eligibility pathway

Controlled allocation
Independent testing
Operating-history requirements
Verified warranties
Technology-specific credit enhancement
Continuous reporting
Increased eligibility as evidence accumulates

Government pilot

Start with a mandate — not a guarantee.

A proposed 90-day feasibility and structuring process.

Days 0–30

Asset and contract mapping

Identify an operating asset pipeline
Classify revenue contracts
Test assignability
Review data quality
Review OEM and optimiser concentration
Identify sodium-ion eligibility

Days 31–60

Structure and credit work

Legal true-sale analysis
SPV structure
Eligibility criteria
Base-case cash-flow model
Stress scenarios
Reserve sizing
Rating-agency pre-sounding

Days 61–90

Investor and policy design

Pension and insurer sounding
Infrastructure-credit sounding
Public-support options
Term-sheet refinement
Regulatory review
Go/no-go recommendation

Proposed decision

Authorise a 90-day BBS feasibility and structuring process leading to an institutional pilot, including a defined pathway for sodium-ion assets.

A feasibility process may also conclude that more asset seasoning or contractual standardisation is required before a first issuance.

Illustrative ambition

First issuanceapprox. EUR 250 million
Potential programme shelfapprox. EUR 1 billion

Illustrative — subject to asset pipeline, contracts, legal analysis, rating feedback and investor demand. Not committed transaction volumes.

Initiated by

Stefan Nolte, MA

Co-Founder & CFO, SALZSTROM

Stefan Nolte is an entrepreneur and corporate-finance executive with more than 15 years of experience across investment banking, M&A, strategy, fundraising and technology companies. As Co-Founder and CFO of SALZSTROM, he is working at the intersection of battery technology, energy infrastructure and capital markets.

Battery-Backed Securities originate from a practical financing question: how can operating battery-storage assets be aggregated, refinanced and made accessible to institutional capital without transferring construction, merchant or early technology risk to pension investors?

BBS is Stefan Nolte’s proposal for answering that question through transparent assets, standardised data, retained sponsor risk and a simple institutional security structure.

Discuss BBS with Stefan

Developed from operating-market experience

Built at the intersection of storage technology and finance

SALZSTROM develops and deploys sodium-ion battery-storage systems for residential, commercial, industrial and utility applications. Its experience with battery systems, operating data, project contracts and financing requirements provides the practical foundation for the BBS proposal.

BBS is intended as an open institutional financing framework — not as a proprietary financing product available only to SALZSTROM.

Learn more about SALZSTROM

FAQ

Direct answers to the questions institutions ask first.

Is BBS simply another green bond?

No. A green bond is a label attached to a corporate or sovereign obligation. BBS is a security architecture: notes issued by a bankruptcy-remote vehicle against a defined pool of operating battery assets, with risk allocated by tranche. The proposition is the structure, not a sustainability label.

How is BBS different from project finance?

Project finance funds one asset or portfolio with bespoke bank debt. BBS aggregates many operating assets into a standardised, rated, capital-markets instrument and recycles capital back to originators. Project and construction finance remain the natural first stage; BBS is the refinancing channel for assets that have proven themselves.

What did securitisation get wrong before 2008?

Underwriting standards collapsed, originators sold every risk on, models replaced data, pools were re-securitised into instruments nobody could analyse, and leverage was hidden. The official post-mortems criticised what was put through the mechanism, not pooling itself.

Why would pension funds consider BBS?

Because senior notes are designed as a defined, monitored and amortising fixed-income exposure backed by physical infrastructure with contracted revenues. Whether any specific note suits a given fund depends on its own due diligence, mandate and the final terms.

Are battery revenues sufficiently predictable?

Partly. Contracted, availability-based and tolling revenues are predictable; merchant revenues are volatile. BBS sizes senior debt service on the predictable component only and treats merchant upside as excess cash flow and credit enhancement rather than as a base case.

Does pooling eliminate power-market correlation?

No. Assets in the same market are exposed to the same price environment. Pooling diversifies asset-specific, counterparty and technical risk; market correlation is addressed through revenue floors, haircuts, reserves and tranche sizing, not through diversification alone.

Why include sodium-ion?

Because eligibility standards written today will shape which technologies can be refinanced for a decade. A lithium-only framework would entrench a single supply chain. A defined sodium-ion pathway allows the technology to earn eligibility on evidence.

Does sodium-ion make the senior notes riskier?

It should not, if the structure is respected. Sodium-specific early risk is meant to sit with sponsors, OEM support, warranties, technology reserves or subordinated capital. Senior notes are sized on verified operating cash flow, whatever the chemistry.

What role should government play?

A catalytic, limited and conditional one: an anchor investment, a capped guarantee, tail-risk or liquidity support and help with standardisation for a first programme. Government should not absorb predictable first loss, replace sponsor capital or subsidise weak underwriting.

Is a EUR 250 million pilot already committed?

No. BBS is currently a proposal, not an issued security. No transaction size, rating, public support or investor commitment has been secured. The figures on this page are illustrative and will be tested in the proposed feasibility process.

Who would originate the assets?

Utilities, independent storage owners, developers with operating portfolios, and technology providers with deployed fleets. BBS is proposed as an open framework; SALZSTROM is one potential participant among many, not the sole beneficiary.

What must be proven before the first issuance?

An adequate pipeline of qualifying operating assets, assignable and enforceable contracts, reliable data, a robust legal true-sale opinion, credible stress results, rating-agency feedback and genuine investor demand. The process may conclude that more seasoning or standardisation is needed first.

Proposal

Read the full BBS proposal.

The proposal sets out the security architecture, lessons from post-crisis securitisation, institutional-investor protections, sodium-ion pathway and recommended 90-day pilot process.

Join the structuring dialogue

Battery-Backed Securities — BBS

A Proposal to Finance Europe’s Storage Infrastructure

Stefan Nolte, MA · August 2026 · PDF, 10 pages, 0.3 MB · English

Download PDF Word version in preparation

Request a briefing

Discuss BBS with Stefan Nolte, MA.

Government, institutional investors, utilities, originators, banks and technology partners are invited to request a briefing or join the structuring dialogue. Requests go directly to Stefan Nolte, MA.

Or write directly: stefan@salzstrom.com

Sources

Evidence behind the claims on this page.

Financial Crisis Inquiry Commission, The Financial Crisis Inquiry Report (2011): “No one in this pipeline of toxic mortgages had enough skin in the game.” www.govinfo.gov/app/details/GPO-FCIC
Regulation (EU) 2017/2402 (EU Securitisation Regulation): risk retention of at least 5%, transparency, due-diligence and credit-granting requirements; restrictions on re-securitisation. eur-lex.europa.eu/eli/reg/2017/2402/oj
European Commission, “Revitalising EU securitisation”, 27 June 2025: proposals to simplify the framework and make capital requirements more risk-sensitive for senior tranches. finance.ec.europa.eu/news/revitalising-eu-securitisation-2025-06-27_en
European Commission, Key facts on energy storage: flexibility needs projected at 24% (288 TWh) of EU electricity demand in 2030; more than 200 GW of storage expected by 2030. energy.ec.europa.eu/topics/research-and-technology/energy-storage/key-facts-energy-storage_en
EIB Group and Enpal, 14 November 2024: Europe’s first public residential solar ABS (EUR 240 million), with EIB anchor investment and EIF guarantee — a precedent for catalytic public participation. www.eif.org/press/all/eib-group-and-enpal-boost-residential-solar-market-in-germany
European Commission Joint Research Centre, Clean Energy Technology Observatory: Battery Technology in the European Union — 2025 Status Report: sodium-ion at TRL 7; average 2024 cell cost of USD 87/kWh with declines projected; growing share of stationary storage. publications.jrc.ec.europa.eu/repository/handle/JRC145289

Time-sensitive figures were checked against the sources listed at the time of publication. Figures describing BBS itself are illustrative.