Northvolt raises $5B to enable expansion of circular gigafactory
18 January 2024
Batterymaker Northvolt has signed a $5-billion non-recourse project financing to enable the expansion of Northvolt Ett in northern Sweden. The deal represents the largest green loan raised in Europe to date.
In addition to the expansion of Northvolt Ett’s cathode production and cell manufacturing, the finance package will enable the expansion of the adjacent recycling plant, Revolt Ett, which is approaching the conclusion of its commissioning and is processing its first materials.
The facility recovers battery-grade metals with a carbon footprint 70% lower than mined raw materials, thereby enabling a fully integrated, circular battery production setup that has not previously existed outside of Asia.
This financing is a milestone for the European energy transition. It will enable us to realize the full potential of Northvolt Ett and demonstrates that circular, sustainable business practices are fundamental to success in today’s industry.
—Peter Carlsson, Co-Founder and CEO of Northvolt
The new debt includes refinancing of the $1.6-billion debt package raised in July 2020, and has been raised on the back of long-term offtake contracts amounting to more than $55 billion with partners including BMW, Scania, Volvo Cars and Volkswagen Group. It is provided by a group of 23 commercial banks, as well as the European Investment Bank (EIB) and the Nordic Investment Bank (NIB), who are both supported by the European Commission’s InvestEU program.
A significant portion of the commercial facilities are covered with certain guarantees combined with direct funding, provided by The Swedish National Debt Office, Euler Hermes, the Export-Import Bank of Korea (KEXIM), Nippon Export and Investment Insurance (NEXI) and the Korea Trade Insurance Corporation (K-Sure).
This is the first loan raised through Northvolt’s Green Finance Framework created in 2023. Reflecting the company’s commitment to sustainability and the circular economy, Northvolt received the highest ‘dark green’ rating attainable for its framework from the external rating company CICERO—the first industrial actor in its sector to do so.
This financing package means that Northvolt has now secured more than $13 billion in equity and debt to enable its expansion in Europe and North America, with the facilities Northvolt Ett (Skellefteå, Sweden), Northvolt Dwa (Gdansk, Poland), Northvolt Drei (Heide, Germany), Northvolt–Volvo Cars joint venture gigafactory ‘NOVO’ (Gothenburg, Sweden), Northvolt Fem (Borlänge, Sweden), Northvolt Cuberg (San Leandro, US) and the recently announced Northvolt Six (Montreal, Canada).
Northvolt was established in 2016 in Stockholm, Sweden. Pioneering a sustainable model for battery manufacturing, the company has received $55 billion in orders from key customers, including BMW, Fluence, Scania, Volvo Cars and Volkswagen Group. The company is currently delivering batteries from its first gigafactory Northvolt Ett, in Skellefteå, Sweden and from its R&D and industrialization campus Northvolt Labs, in Västerås, Sweden, supported by over 5,000 employees in Sweden, Germany, Norway, Poland, Portugal, the US and Canada.
Posted on 18 January 2024 in Batteries, Manufacturing, Market Background, Recycling
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