Northvolt has signed a US$1.6bn debt raise provided by a consortium of commercial banks, pension funds and public financial institutions, increasing the total amount of capital raised to date for development of factories and R&D investments to more than US$3bn.

“The momentum for electrification is stronger than ever,” said Northvolt co-founder and CEO, Peter Carlsson.

“Our customers need large volumes of high-quality batteries with a low CO2 footprint, and Europe must build a fully-regionalised value chain to support them.”

The debt financing package is provided by a group of commercial banks and pension funds: APG, BNP Paribas, Danske Bank, Danica Pension, IMI – Intesa Sanpaolo, ING, KfW IPEX-Bank, PFA Pension, SEB, Siemens Bank, SMBC, Société Générale, Swedbank and UniCredit, as well as the European Investment Bank, the Nordic Investment Bank and the Export-Import Bank of Korea (KEXIM).

The loan is structured with certain guarantees from Euler Hermes (transaction subject to final approval), Nippon Export and Investment Insurance (NEXI) and BPI France.

“The fact we have these financial institutions supporting a new industry in Europe is a clear sign of where the markets are headed and the opportunity that brings for sustainable projects,” said Northvolt CFO, Alexander Hartman.

Including the US$1.6bn debt raise, Northvolt has to date raised more than US$3bn in equity and debt to support the development of two gigafactories for lithium ion battery cell production: Northvolt Ett in Skellefteå, Sweden and Northvolt Zwei in Salzgitter, Germany.

The company is also making significant investments in battery cell technology, process development and recycling at the recently established industrialisation factory, Northvolt Labs, in Västerås, Sweden, which produced its first battery cells in late 2019.

Northvolt Ett, with a potential annual output of 40 GWh, is under construction and scheduled for start of production in 2021. In parallel, the permitting process is underway for Northvolt Zwei, which is being established as a joint venture together with the Volkswagen Group and scheduled to start operations in 2024 with a potential output of more than 20 GWh.

Northvolt also has an operational battery systems factory in Gdansk, Poland.

Northvolt is targeting a 25% market share in Europe by 2030, equalling around 150 GWh of commissioned annual production capacity. At the same time, Northvolt aims to secure 50% of its raw material requirements from recycled batteries.

The recycling target will be achieved through establishing a full-scale recycling facility at Northvolt Ett.