Swedish lithium-ion battery producer Northvolt has raised US$1.2bn in convertible bonds to finance plans for further expansion in Europe and North America.

Leading investors included Investment Management Corporation of Ontario (IMCO), BlackRock and Canada Pension Plan Investment Board (CPP Investments). Additionally, Ontario Municipal Employees Retirement System (OMERS) has made its third major investment in the battery manufacturer.

The funding is an extension of the US$1.1bn convertible note signed in July 2022.

According to Reuters, several “funds to invest in the note were classed as ‘dark green’ under the European Union’s sustainable finance framework”.

Northvolt has now raised approximately US$9bn in equity and debt to deliver on over US$55bn in orders from key customers, such as BMW, Scania, Volvo and Volkswagen.

“We have found a committed group of investors that understands both the urgent need and massive financial potential in enabling the swift electrification of society,” said Northvolt CFO Alexander Hartman.

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“However, there is a long road ahead if Europe and North America are to reach their full potential as leaders of the energy transition. To create a pathway for global warming below 1.5°C, both the private and public sector need to mobilise resources at an unprecedented scale.”

In May, Northvolt finished the assembly of its first energy storage system (ESS) factory in Gdansk, Poland. Customer deliveries are expected to commence later this year.