EIB gives first clearance for €350M loan for Northvolt

The European Investment Bank (EIB) has announced their principle agreement to support the financing of Northvolt’s planned battery factory for the production of lithium-ion cells in Skellefteå, Sweden, with a loan of 350 million euros.

In February 2018, the Swedish company led by former Tesla manager Peter Carlsson had already secured financing of up to 52.5 million euros from the European Investment Bank to set up a demonstration line for the planned cell production in Sweden. While this demonstration line is being built together with a research plant under the roof of Northvolt Labs in Västerås, the actual battery factory called Northvolt ett is being built in Skellefteå. The first construction phase of the plant will be completed in 2020, after which the battery production capacity will rise to 32 GWh per year.

Regarding the background to the financing: Northvolt intends to have generated around 1.6 of a total of four billion euros by the middle of the year, which will be required for the construction of its planned Gigafactory in Skellefteå, Sweden. The €350 million loan now principally approved by the EIB’s Board of Directors would be distributed through the European Strategic Investment Fund (EFSI) following the conclusion of a loan agreement – and would, of course, be highly welcome from Northvolt’s point of view. Carlsson calls the general approval a “key moment in the process of finalizing our capital raise to support the establishment of Northvolt Ett”. The EIB loan would help specifically to finance the first 16 GWh of battery capacity production.

EIB Vice-President Andrew McDowell stressed that the in-principle approved loan to Northvolt is the EIB’s largest direct financing approval to date for battery technology. In Brussels, Maroš Šefčovič, Vice-President of the European Commission for the Energy Union, also commented on the news: “The EIB and the Commission are strategic partners under the EU Battery Alliance. 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.”

Speaking of European battery cell production: Northvolt is being widely discussed at the moment, because yesterday it was publicly announced that the Swedes, as partners of Volkswagen, are also involved in the construction of a battery cell plant in Salzgitter. To the surprise of many industry observers, the Wolfsburg-based company is not relying on the South Korean manufacturer SK Innovation for its decision to enter the mass production of battery cells, but rather on Northvolt, a start-up with currently no more than 200 employees.

Meanwhile, Reuters have learned that Northvolt is being courted by another potential partner: Apparently, Ikea is flirting with the idea of investing in the start-up. The talks are allegedly already in the final phase.

northvolt.com, eib.org, reuters.com (Ikea)