Europe’s Investment Bank (EIB) has signed a EUR480m (US$528m) loan agreement with LG Chem Wroclaw Energy, the Polish subsidiary of LG Chem Group established to develop the group’s battery production facility in Europe.

The financing will be used for the construction and operation of manufacturing facilities for lithium-ion (li-ion) cells and batteries for battery-powered electric vehicles.

The EIB financing will cover around a third of the total project costs, estimated at EUR1.5bn. The remainder will come from the company’s own resources and other financing sources.

The additional manufacturing facilities will be located on the industrial site of LG Chem Wroclaw Energy in south-west Poland.

The project supplements smaller production facilities on the same site and includes a factory with several newly-developed technologies to mass-produce high energy density li-ion electrodes, cells, modules and battery packs, thereby improving energy density, fast-charging capability, safety and cost efficiency.

The EIB-backed project will have an annual production capacity of more than 35 GWh, which can potentially power more than 500,000 zero-emission electric cars per year.

“This first EIB operation with LG Chem Wroclaw Energy is significant for many reasons,” said EIB VP Teresa Czerwinska, overseeing operations in Poland.

“It helps Europe to build a critical mass in electric vehicle battery production at a pivotal time of electric vehicle commercialisation in Europe; it promotes a shift to electromobility and to a greener automotive industry; and it helps create new qualified jobs in an industrial region in transition to a new economic model.”

The implementation of the new investment programme will enable the company to ramp up its battery capacity output to 65 GWh, making the Polish facility one of the largest lithium-ion cell factories in the world.

More than 1,800 jobs will be created at the Wroclaw site, taking the total workforce up to more than 6,000 full-time employees by end-2022.