Northvolt raises $5bn, Europe’s largest green loan

Swedish lithium-ion battery producer Northvolt announced the signing of a $5 billion “non-recourse project financing” to expand Northvolt Ett, its battery factory in northern Sweden.

The deal represents the largest green loan raised in Europe to date.

The new debt includes refinancing of a $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 companies including BMW, Scania, Volvo Cars and Volkswagen Group.

The debt 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.

“In addition to the expansion of Northvolt Ett’s cathode production and cell manufacturing, the finance package will enable the expansion of the adjacent recycling plant, Revolt Ett, which is approaching the conclusion of its commissioning and is processing its first materials,” said Northvolt.

“The facility recovers battery-grade metals with a carbon footprint 70% lower than mined raw materials, thereby enabling a fully integrated, circular battery production setup that has not previously existed outside of Asia.”

Northvolt CEO Peter Carlsson said: “This financing 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.”

Northvolt CFO Alexander Hartman said: “This has been an incredible team effort, involving long due diligence processes, new partnerships with strong institutions, and developing cutting edge financing structures focused on sustainability – all to close one of the largest green financing deals in history.”

This latest 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).

Northvolt was established in 2016 in Stockholm and has over 5,000 employees in Sweden, Germany, Norway, Poland, Portugal, the US and Canada.