EIT InnoEnergy & Demeter launch battery raw material fund with €500m target

January 19, 2024

Sustainable energy investor EIT InnoEnergy, which is co-funded by the European Union, and private equity and venture capital firm Demeter Investment Managers has launched  a fund dedicated to the development of a “resilient and diverse” battery raw material supply chain for Europe.

With a target size of €500 million, the EBA Strategic Battery Materials Fund is launched “amidst soaring European demand for batteries which is exposing significant gaps in the upstream (mining, processing) of the EU’s battery material supply chain”, an EIT InnoEnergy statement said.

At least 70% of investments from the EBA Materials Fund will be dedicated to projects increasing EU domestic production from mining, processing, refining and recycling in EU and neighbouring countries. The remaining 30% will focus on increasing raw material supply from EU Raw Material Partnership countries, such as Canada, Namibia, and Argentina.

Demeter will act as fund manager, while Societe Generale will act as financial advisor for the capital raising.

In line with the EU’s Critical Raw Materials Act (CRMA) requirements to decrease the EU’s overreliance on foreign supply, the fund aims to boost domestic capacities for strategic battery materials such as lithium, nickel, cobalt, manganese, and graphite.

Diego Pavia, CEO of EIT InnoEnergy said: “To secure a thriving and resilient European battery industry, we must intensify our efforts in domestic battery raw materials production. While it’s encouraging to see a growing list of ambitious initiatives and financial stimuli from public and private players, their focus is typically on mature projects (post-final investment decision). Yet these initiatives need a deal flow of de-risked projects, and therefore we also need a focus on early-stage upstream projects committed to a sustainable, traceable and transparent battery materials supply chain – and that’s exactly what the EBA Materials Fund will deliver.”

European Commission executive vice-president Maroš Šefčovič in charge of the European Green Deal and the European Battery Alliance said: “The battery industry is of strategic importance and a key battleground for global competitiveness. Therefore, it is vital to continuously up our game, with securing battery raw materials being the single biggest task ahead. Today’s innovative announcement shows that we mean business – on both, boosting our domestic European capacities and bolstering diversification via trade and cooperation with reliable partners. We need to be strategic, bold, agile.”

Antoine Troesch, managing partner at Demeter, added: “Demeter is delighted to launch this initiative together with EIT InnoEnergy, in a critical segment for European countries to succeed in energy and ecological transition. Demeter will bring its recognised expertise in green investments and its methodologies for ensuring those investments meet the highest ESG standards.”