Northvolt secures funds for first circular battery gigafactory in western world

Swedish battery developer and manufacturer Northvolt announced on Tuesday that it had secured a mammoth $US5 billion loan which will help facilitate the expansion of the Northvolt Ett gigafactory and its adjacent battery recycling plant, Revolt Ett.

Northvolt announced Tuesday that it had signed a $US5 billion non-recourse project financing to enable the expansion of Northvolt Ett in northern Sweden.

The deal is the largest green loan raised in Europe to date.

In addition to expanding Northvolt Ett’s cathode production and cell manufacturing, the finance package will also enable the company to expand its adjacent recycling plant, Revolt Ett, which is reaching the conclusion of its commissioning process and already processing its first materials.

“This financing is a milestone for the European energy transition,” said Peter Carlsson, co-founder and CEO of Northvolt.

“It will enable us to realize the full potential of Northvolt Ett and demonstrates that circular, sustainable business practices are fundamental to success in today’s industry.”

Northvolt Ett (Ett is ‘One’ in Swedish) began commissioning in 2021 and assembled the first battery cell in December 2021. With a planned production capacity of 60GWh per year, Northvolt Ett is the first of three gigafactories Northvolt is planning to build – with a second gigafactory built in partnership with Volvo in Gothenburg, Sweden, and Northvolt Drei (‘Three’ in German) in Heide, Germany.

The adjacent Revolt Ett is expected to be capable of recycling around 125,000 tonnes of battery materials per year, including production scrap from the neighbouring Northvolt Ett.

Revolt, Northvolt’s in-house battery recycling program, is capable of recovering battery-grade metals with a carbon footprint 70% lower than mined raw materials. This recycling allows for a fully integrated, circular battery production setup that has previously only existed inside Asia.

The $US5 billion loan includes refinancing of the $US1.6 billion debt package raised in July 2020 and has been raised on the back of long-term offtake contracts amounting to over $55 billion with partners including BMW, Scania, Volvo Cars, and Volkswagen Group.

The loan has been provided by a group of 23 commercial banks in partnership with the European Investment Bank (EIB) and the Nordic Investment Bank (NIB), who are both supported by the European Commission’s InvestEU programme.

“This has been an incredible team effort, involving long due diligence processes, new partnerships with strong institutions, and developing cutting edge financing structures focused on sustainability – all to close one of the largest green financing deals in history,” said Alexander Hartman, CFO of Northvolt.

This latest financing package means that Northvolt has now secured over $US13 billion in equity and debt to support the company’s continued expansion in Europe and North America.