Hyundai Motor Group and LG Energy Solution Ltd (LGES) this week announced they have secured loans and guarantees worth US$710m to fund their electric vehicle (EV) battery cell joint venture in Indonesia, according to reports in South Korea.

The project will be funded by five different international financial institutions with a ten-year repayment term, guaranteed by Hyundai Motor Company, Kia Corporation and LGES in proportion with their stakes in the joint venture. Seoul-based trade insurer Korea Trade Insurance Corporation will provide credit guarantees.

The US$1.1bn joint venture aims to build an electric vehicle (EV) battery cell plant in a new industrial complex in Karawang, just east of Indonesia’s capital city Jakarta. It is scheduled to become operational in 2024 with an initial production capacity of 10 GWh of batteries per year, enough to power150,000 EVs, rising to 30 GWh later on.

Earlier this year LGES said it plans to invest a total of US$9bn in Indonesia to establish an integrated EV battery supply chain in partnership with its majority shareholder LG Chem and other companies.

Hyundai began production on its Ioniq 5 in Indonesia in March and plans to step up its EV programme in the country in the next few years.