Sweden-based battery company Northvolt announced that it is raising $1.6 billion in debt to support the development of two gigafactories for lithium ion battery cell production. This will bring the total capital raised by the company to over $3 billion.

Peter Carlsson, co-founder and CEO, Northvolt, said:

“The momentum for electrification is stronger than ever. Our customers need large volumes of high-quality batteries with a low CO2 footprint, and Europe must build a fully regionalized value chain to support them.”

The financing was raised through a consortium of commercial banks, pension funds and public financial institutions, including APG, BNP Paribas, Danske Bank, Danica Pension, IMI – Intesa Sanpaolo, ING, KfW IPEX-Bank, PFA Pension, SEB, Siemens Bank, SMBC, Société Générale, Swedbank and UniCredit, as well as the European Investment Bank, the Nordic Investment Bank and the Export-Import Bank of Korea (KEXIM).

Alexander Hartman, CFO, Northvolt, said:

“The fact that we have these world-class financial institutions supporting a new industry in Europe is a clear sign of where the markets are headed and the opportunity that brings for sustainable projects. This new industrial landscape will need significant investments over the coming years.”

Diederik van den Berg, Global Lead Renewables & Power, Energy at ING, co-lead of the deal, said:

“We congratulate Northvolt on reaching this important milestone and eagerly anticipate the future this step will help usher in. As a leading bank in financing the energy transition, ING is excited to be part of this first chapter of the Northvolt story; we look forward to supporting the company in its ambition to transform the battery production industry.”

Northvolt is developing two gigafactories for lithium ion battery cell production: Northvolt Ett in Skellefteå, Sweden, and Northvolt Zwei in Salzgitter, Germany. With a potential annual output of 40 GWh, Northvolt Ett is already under construction and scheduled to start production in 2021. Northvolt Ett will be Europe’s first home-grown gigafactory.

Celebrating this milestone, European Commission Vice-President in charge of the European Battery Alliance, Maroš Šefčovič, said:

“The EIB and the Commission are strategic partners under the EU Battery Alliance, working closely with the industry and Member States to put Europe on a firm path towards global leadership in this strategic sector. Northvolt has been among our frontrunners, set to build Europe’s first home-grown Gigafactory for lithium-ion battery cells, with a minimal carbon footprint. By supporting this state-of-the-art project, we also confirm our resolve to boost Europe’s resilience and strategic autonomy in key industries and technologies.”

Northvolt stated that the company is targeting a 25 percent market share in Europe by 2030, equaling approximately 150 GWh of commissioned annual production capacity. Northvolt aims to secure 50 percent of its raw material requirements from recycled batteries. The recycling target will be achieved through establishing a full-scale recycling facility at Northvolt Ett.