Northvolt has secured approval from the European Investment Bank (EIB) for a EUR52.5m (US$65m) to construct a li-ion battery factory in Västerås, Sweden.
The financing will be supported by InnovFin – EU Finance for Innovators’s Energy Demonstration Projects facility – with the financial backing of the European Union using Horizon 2020 Financial Instruments.
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The parties will now finalise negotiations and, after signature, Northvolt is expected to start construction of its demonstration line in the coming months. The facility will serve to show the commercial viability of the concept and to qualify and industrialise products together with Northvolt’s customers.
The batteries are targeted for use in transport, stationary storage, and industrial and consumer applications.
The demonstration site will also comprise a research facility and in total the Västerås operations will employ between 300-400 people. The launch of the demonstration plant is a key step towards the establishment of Northvolt’s large-scale li-ion battery factory in Skellefteå, eventually targeting a production of 32 GWh worth of battery capacity annually.
“The Bank is fulfilling one of its main purposes by supporting this type of research and development in Europe,” said EIB VP, Ambroise Fayolle.
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By GlobalData“With the growing momentum of clean energy and electric mobility, batteries will become ever more important. Europe is currently lagging behind when it comes to battery manufacturing and this project deserves European backing to fill that gap.”
For his part, VP of the European Commission in charge of the Energy Union, Maroš Šefcovic added: “Batteries are a component of our competitiveness and to capture a new European market worth EUR250bn annually as of 2025, we need to act fast.
“I therefore welcome the decision taken by the EIB, which will help this industry-led project take off the ground. It is important to pool all available instruments at the national and European level, such as InnovFin.
“The European Battery Alliance will continue supporting prospective partnerships throughout the value chain.”
The EIB is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
n 2017 alone, the Bank made available nearly EUR2.34bn in loans for Swedish projects in sectors including research & development, industry, nearly-zero-energy-buildings and telecommunications.
InnovFin Energy Demonstration Projects provides loans, loan guarantees or equity-type financing typically between EUR7.5m and EUR75m to demonstration projects in the fields of energy system transformation, including but not limited to renewable energy technologies, smart energy systems, energy storage, carbon capture and storage or carbon capture and use, helping them to bridge the gap from demonstration to commercialisation.
The product is rolled out directly by the EIB.
