Northvolt receives funding approval for battery plant in Heide

In total, the decision that has now been handed over involves funding of around 700 million euros. Of this, around 564 million euros will be provided by the federal government and around 136 million euros by the state of Schleswig-Holstein. The funding is spread over several annual tranches but is still subject to approval by the European Commission under state aid law.

According to the German Federal Economics Minister Robert Habeck, his ministry requested an exemption from the budget freeze for the release of funds, which was granted by the Ministry of Finance. We remember: just one month before the ruling of the Federal Constitutional Court, which led to the budget freeze, the German government’s Budget Committee had decided to assume liability for a convertible bond to locate Northvolt’s battery cell factory in Schleswig-Holstein.

The convertible bond secured by the federal government is intended to support the project over and above the already approved IPCEI funding of around 155 million euros. The funding is to be provided on the basis of the EU’s new “Temporary Crisis and Transition Framework” (TCTF). The EU Commission must therefore still approve the funding. If this is the case, the TCTF will be applied in Germany for the first time.

The planned Northvolt Drei battery factory in Heide was announced in March 2022. Construction was scheduled to begin in 2025, with 3,000 jobs to be created in the final phase. The production capacity is 60 GWh, which should be enough for one million electric cars. In addition to battery production, Northvolt is also aiming to build a battery recycling plant on-site. Less than two months later, in May 2022, the company received the IPCEI funding decision for the aforementioned 155 million euros.

There is now talk of commissioning in 2026. Northvolt itself brought the high energy prices into play and is also pushing ahead with a factory project in Canada to benefit from the subsidies there and the demand due to the Inflation Reduction Act in the USA. However, both the company and politicians have always emphasized that the goal remains to build the factory in Schleswig-Holstein.

According to the FAZ, the project has an investment volume of 4.5 billion euros. The company has already invested around 100 million euros of its own funds in the construction project in Heide.

“Securing the funding for Northvolt is an important step towards triggering a major private investment that will create added value and jobs in an industry of the future,” said Habeck at the presentation of the funding decision. “And it is good that we were able to obtain the exemption from the budget freeze.”

faz.net, spiegel.de (both in German)