Energy storage system manufacturer Northvolt has secured a $5 billion non-recourse project financing to enable the expansion of its gigafactory, Northvolt Ett, in northern Sweden.
The deal represents the largest green loan raised in Europe to date. 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 more than $55 billion with partners including BMW, Scania, Volvo Cars and Volkswagen Group. It 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).
In addition to facilitating 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. The facility recovers battery-grade metals “with a carbon footprint 70 per cent lower than mined raw materials”, according to Northvolt.
Peter Carlsson, co-founder and CEO of Northvolt, said: “This financing is a milestone for the European energy transition. It will enable us to realise the full potential of Northvolt Ett and demonstrates that circular, sustainable business practices are fundamental to success in today’s industry.”
Northvolt’s senior debt adviser was BNP Paribas, and its legal advisers were Allen & Overy and Mannheimer Swartling.