By Mark McSherry

Canada’s Investment Management Corporation of Ontario (IMCO) announced it will invest $400 million in battery producer Northvolt to help the Swedish company expand production of lithium-ion batteries ahead of a possible initial public offering.

Northvolt, which counts BMW and Volkswagen among its investors, last year delivered its first battery cells from its gigafactory in Skelleftea in Sweden.

Northvolt has raised more than $8 billion in debt and equity since 2017, including $1.1 billion in convertible notes last year from multiple investors.

IMCO said: “The joint investment by IMCO’s Fundamental Equities and Global Infrastructure is fueled by a priority both groups share to manage climate change and enable the global transition to a net zero emissions economy.

“This investment demonstrates substantive progress on IMCO’s Climate Action Plan, which includes a commitment to invest 20 per cent of its assets under management in climate solutions by 2030.”

IMCO has invested $400 million in Northvolt through convertible notes, it told Reuters. IMCO manages more than $73 billion in assets.

Northvolt was valued at $12 billion in 2021 and has been in talks with banks about an initial public offering that could value it at more than $20 billion.

IMCO Chief Investment Officer Rossitsa Stoyanova said: “This innovative collaboration between IMCO’s Fundamental Equities and Global Infrastructure teams is paving the way for meaningful capital deployment towards the energy transition.

“With this investment, we are tangibly delivering on our Climate Action Plan, while also strategically managing material ESG risks, ultimately generating sustainable long-term value for our clients.”

Northvolt CFO Alexander Hartman said: “We’re excited to partner with IMCO’s Fundamental Equities and Global Infrastructure teams to build the future of clean energy together.

“This investment fuels our expansion efforts, allowing us to further extend our global footprint and drive sustainable progress in our mission to deliver the world’s greenest battery.”