Swedish battery maker Northvolt said it had raised US$5bn of financing to expand its cell manufacturing plant, Northvolt Ett, in northern Sweden.

The deal was said to be the largest green loan raised in Europe to date. It is non-recourse financing where repayment is sourced from the project’s earnings rather than Northvolt’s assets.

The new debt includes refinancing of the $1.6bn debt package raised in July 2020, and is on the back of long term offtake contracts worth $55bn with BMW, Scania, Volvo Cars and Volkswagen.

It is provided by a group of 23 commercial banks, as well as the European Investment Bank (EIB) and the Nordic Investment Bank (NIB) which are both supported by the European Commission’s InvestEU programme.

In addition to 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 which recovers battery grade metals.

This is the first loan raised through Northvolt’s Green Finance Framework created in 2023. The company has now secured $13bn in equity and debt to enable its expansion in Europe and North America.

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By GlobalData