Sweden’s Northvolt to receive €350 million loan from the EIB to build its gigafactory for green lithium batteries

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The European Investment Bank (EIB) has agreed to finance Northvolt‘s plan for the first gigafactory for lithium-ion battery cells in Europe with a €350 million loan, pending the finalisation of the due diligence process and negotiations.

Northvolt was founded in 2016 with the mission to build the world’s greenest battery cell, recyclable and with a minimal carbon footprint, to enable Europe’s transition to renewable energy. Northvolt’s team of experts is building the next generation battery cell factory focused on process innovation, scale ,and vertical integration. Once completed, it will be one of Europe’s largest battery cell factories, producing 32 GWh worth of capacity annually. The batteries from the Northvolt factory will be targeted for use in automotive, grid storage, and industrial and portable applications.

The gigafactory will be established in Skellefteå in northern Sweden – a region home to a prominent raw material and mining cluster which has a long history of process manufacturing and recycling. Noting the region’s clean power base, building the factory in northern Sweden will enable Northvolt to utilise 100% renewable energy in its production processes.

Upon the conclusion of the loan agreement, the financing will be supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe.

“The development of a competitive and green battery value chain within Europe can not only cut greenhouse gas emissions by decarbonising power generation and transport, but can also help protect millions of well paid jobs in European industries in the face of increasing global competition,” said EIB Vice-President Andrew McDowell. “The €350 million loan to Northvolt approved in-principle today by our Board of Directors is the largest ever direct EIB financing approval for battery technology, and we look forward to working with Northvolt over the coming months to finalize contracts.”

“The EIB and the Commission are strategic partners under the EU Battery Alliance,” added Maroš Šefčovič, European Commission Vice-President for the Energy Union. “I welcome the significant support proposed by the EIB to Northvolt gigafactory as a stepping-stone towards building a competitive, sustainable and innovative value chain, with battery cells manufactured at scale, here, in Europe. Our two institutions are working closely with the industry and key Member States to put the EU on a firm path towards global leadership in this rapidly expanding sector.”

Northvolt Ett will serve as Northvolt’s primary production site, hosting active material preparation, cell assembly, recycling and auxiliaries. The construction of the first quarter of the factory will be completed in 2020.

“This EIB in principle approval is a key moment in the process of finalising our capital raise to support the establishment of Northvolt Ett,” said Peter Carlsson, co-founder and CEO of Northvolt. “Today, we are one step closer to our goal of building the greenest batteries in the world and enabling the European transition to a decarbonised future.” 

“Today’s decision by the EIB is very gratifying and a big step towards a large-scale battery production in the EU and a fossil free welfare society,” said Ibrahim Baylan, Swedish Minister for Business, Industry and Innovation. “The decision shows that there are prerequisites in Sweden for sustainable battery production, it is important for Sweden and the rest of the EU to produce battery materials and battery cells, based on green, Swedish electricity.”