Northvolt raises $5 billion to enable expansion of first circular gigafactory in the western world
16 January, 2024
The largest green loan raised in Europe to date will not only facilitate the expansion of Europe's first homegrown gigafactory, Northvolt Ett, but also the realization of Northvolt's ambitious plans for battery recycling.
Stockholm, Sweden – Northvolt today announced the signing of 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.
Peter Carlsson, Co-Founder and CEO of Northvolt, commented: “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.”
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 over $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 programme.
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).
Alexander Hartman, CFO of Northvolt, commented: “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.”
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.
Emma Nehrenheim, Chief Environmental Officer at Northvolt, commented: “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.”
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).
For support on this financing package, Northvolt extends its gratitude to its senior debt advisor, BNP Paribas, and legal advisors Allen & Overy and Mannheimer Swartling.
About Northvolt
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.