Northvolt raises $5 billion for European gigafactory

January 18, 2024

Northvolt, a Swedish battery manufacturer, has announced the signing of a $5 billion non-recourse project financing to facilitate the expansion of Northvolt Ett, Europe’s first homegrown gigafactory, and the adjacent recycling plant, Revolt Ett, the largest green loan in Europe to date.

The financing will support the expansion of Northvolt Ett’s cathode production and cell manufacturing, and Revolt Ett, a battery material recycling plant with a carbon footprint 70% lower than mined raw materials. This setup allows for a fully integrated, circular battery production process.

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. The loan 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).

This is the first loan raised through Northvolt’s Green Finance Framework created in 2023. The company received the highest ‘dark green’ rating attainable for its framework from the external rating company CICERO.

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).