Mobility Portal, Spain
Date: January 17, 2024
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By Mobility Portal
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Northvolt raises $5 billion to enable expansion of first circular gigafactory in the western world

The funds will be instrumental in advancing the expansion of Northvolt Ett, Europe's foremost domestically established gigafactory, situated in northern Sweden.
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Northvolt has successfully raised a staggering $5 billion in non-recourse project financing, marking the largest green loan ever secured in Europe.

The funds will be instrumental in advancing the expansion of Northvolt Ett, Europe’s foremost domestically established gigafactory, situated in northern Sweden.

The comprehensive financing package not only supports the augmentation of cathode production and cell manufacturing at Northvolt Ett but also fuels the growth of the adjacent recycling plant, Revolt Ett.

This cutting-edge facility, nearing completion of its commissioning, is set to revolutionize battery recycling with a carbon footprint 70% lower than traditional mining methods, positioning the firm at the forefront of sustainable battery production.

Peter Carlsson, Co-Founder and CEO of the company, emphasized the significance of the financing, stating, “This 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 financing includes the refinancing of a $1.6 billion debt package raised in July 2020 and is underpinned by long-term offtake contracts exceeding $55 billion with key partners such as BMW, Scania, Volvo Cars, and Volkswagen Group.

The consortium providing the funds comprises 23 commercial banks, along with support from the European Investment Bank (EIB) and the Nordic Investment Bank (NIB), both backed by the European Commission’s InvestEU program.

A notable feature of the financing is the involvement of various entities providing guarantees and direct funding, including 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 the firm, highlighted the collaborative effort involved in securing the financing, calling it “an incredible team effort” and “one of the largest green financing deals in history.”

This milestone marks the first loan raised under Northvolt’s Green Finance Framework, established in 2023.

Notably, Northvolt received the highest “dark green” rating from CICERO, an external rating firm— a testament to the company’s commitment to sustainability and the circular economy.

Emma Nehrenheim, Chief Environmental Officer at Northvolt, expressed pride in the company’s commitment to producing the world’s greenest battery, attracting top-tier financial partners and emphasizing the global interest in investing in electrification and climate change mitigation.

With this financing package, Northvolt has now secured over $13 billion in equity and debt, paving the way for its expansion in Europe and North America across various facilities, including 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).

Read more: Europe will open 250 battery factories by 2033. What are the confirmed projects?

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.

Read more: Competition with the USA, raw material supply, and new factories: Challenges of the European battery market

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