The first circular gigafactory in the western world, $5 billion investment from Northvolt

Northvolt, a company based in Stockholm, Sweden, has recently secured a $5 billion non-recourse project financing agreement. This funding will be used to support the expansion of Northvolt Ett, located in northern Sweden. This deal is significant as it represents the largest green loan ever raised in Europe.

Alongside the expansion of Northvolt Ett’s cathode production and cell manufacturing capabilities, the financing will also facilitate the growth of the adjacent recycling plant, Revolt Ett.

This plant, which is nearing the completion of its commissioning phase, aims to recover battery-grade metals with a significantly lower carbon footprint compared to traditional mining methods.

This development will contribute to the establishment of a fully integrated, circular battery production setup, a concept that has been predominantly seen in Asia until now.

Northvolt prides itself on developing the world’s greenest lithium-ion batteries with a minimal CO2 footprint. The company has already achieved a significant reduction in the carbon footprint of its lithium-ion cells.

This program aims to provide long-term funding to the European Union by leveraging both private and public funds in alignment with EU policy priorities.

• Northvolt, a Swedish battery manufacturer, has secured $5 billion in debt financing to expand its first gigafactory, Northvolt Ett, in Sweden.
• The financing package, which is the largest green loan raised in Europe so far, involves 23 commercial banks, the European Investment Bank (EIB), and the Nordic Investment Bank (NIB).
• With this funding, Northvolt aims to increase the annual output capacity of Northvolt Ett to up to 60 GWh and establish a recycling facility on the same site.
• The total amount of debt and equity raised by Northvolt now stands at $13 billion.
• Peter Carlsson, co-founder and CEO of Northvolt, considers this financing a significant milestone for the European energy transition and emphasizes the importance of circular and sustainable business practices in the industry.
• In addition to expanding Northvolt Ett’s cathode production and cell manufacturing, the financing will also support the growth of the adjacent recycling plant, Revolt Ett.
• The recycling facility, which is nearing completion, aims to recover battery-grade metals with a carbon footprint 70% lower than mined raw materials.
• Northvolt claims to be developing the world’s greenest lithium-ion batteries, with a minimal CO2 footprint.
• The company has already reduced its lithium-ion cell carbon footprint to 33 kg CO2/kWh, which is two-thirds lower than the industry reference.
• Northvolt’s long-term goal is to achieve 150 GWh of annual cell production by 2030, with a carbon footprint of 10 kg CO2/kWh and 50% of the materials sourced from recycling.
• Northvolt, founded in 2016, has rapidly emerged as Europe’s most well-funded climate tech start-up.
• The company has secured significant investments from major players like Volkswagen, BlackRock, and Goldman Sachs.
• Recently, Northvolt obtained EU approval for EUR 902 million in German state aid to construct an electric vehicle battery production plant in northern Germany.
• The new debt deal involves refinancing a $1.6 billion debt package raised in July 2020.
• The battery maker attributes the success of the debt deal to long-term offtake contracts worth over $55 billion.
• The InvestEU program, facilitated by the EIB and the NIB, supports a EUR 392 million investment in Europe’s first circular gigafactory.
• This program leverages private and public funds to provide long-term funding for EU policy priorities.
• Maroš Šefčovič, the Commission Executive Vice-President responsible for the European Green Deal and the European Battery Alliance, emphasizes the strategic importance of Europe’s battery industry.
• Šefčovič commends Northvolt as a battery pioneer and highlights the EU’s ability to build an innovative, sustainable, and globally competitive battery ecosystem.
• Northvolt’s success story is part of the broader European Battery Alliance, which encompasses 160 industrial projects across the value chain.

Northvolt team comments:

“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.

“This has been an incredible team effort, involving long due diligence processes, new partnerships with strong institutions, and developing cutting edge financing structures focused on sustainability – all to close one of the largest green financing deals in history” Alexander Hartman, CFO.

“I’m proud to see how our ambition to mass produce the world’s greenest battery attracts top-tier financial partners, as global capital is looking to invest in electrification and climate change mitigation. It has become obvious that the creation of a new industry standard not only attracts world-leading talent, but also major financial institutions that aim to align their strategy with long-term macro trends” Emma Nehrenheim, Chief Environmental Officer.

In December 2021, Northvolt achieved a significant milestone by becoming the first European battery company to produce battery cells that were fully designed, developed, and assembled in-house. These cells were manufactured at Northvolt Ett, which has a capacity of 16 GWh. Additionally, Northvolt has announced plans for three more battery production plants in Germany, Canada, and Sweden.