Northvolt recently announced the signing of a $5 billion non-recourse project financing to enable the expansion of Northvolt Ett in northern Sweden. This deal represents the largest green loan raised in Europe to date.
Along with 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 is approaching the conclusion of its commissioning and is processing its first materials. The facility recovers battery-grade metals with a carbon footprint 70% lower than mined raw materials, thereby enabling a fully integrated, circular battery production setup that has not previously existed outside of Asia.
The new debt includes refinancing of the $1.6 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. And it is provided by a group of 23 commercial banks, as well as the European Investment Bank (EIB) and the Nordic Investment Bank (NIB), who are both supported by the European Commission’s InvestEU program.
A major portion of the commercial facilities are covered with certain guarantees combined with direct funding, provided by The Swedish National Debt Office, Euler Hermes, the Export-Import Bank of Korea (KEXIM), Nippon Export and Investment Insurance (NEXI) and the Korea Trade Insurance Corporation (K-Sure).
This is the first loan raised through Northvolt’s Green Finance Framework created last year. And reflecting the company’s commitment to sustainability and the circular economy, Northvolt received the highest ‘dark green’ rating attainable for its framework from the external rating company CICERO — the first industrial actor in its sector to do so.
This financing package means that Northvolt has now secured more than $13 billion in equity and debt to enable its expansion in Europe and North America, with the facilities Northvolt Ett (Skellefteå, Sweden), Northvolt Dwa (Gdansk, Poland), Northvolt Drei (Heide, Germany), Northvolt–Volvo Cars joint venture gigafactory ‘NOVO’ (Gothenburg, Sweden), Northvolt Fem (Borlänge, Sweden), Northvolt Cuberg (San Leandro, US) and the recently announced Northvolt Six (Montreal, Canada).
For support on this financing package, Northvolt worked with its senior debt advisor, BNP Paribas, and legal advisors Allen & Overy and Mannheimer Swartling.
KEY QUOTES:
“This financing is a milestone for the European energy transition. 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.”
— Peter Carlsson, Co-Founder and CEO of Northvolt
“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.”
— Alexander Hartman, CFO of Northvolt
“I’m proud to see how our ambition to mass produce the world’s greenest battery attracts top-tier financial partners, as global capital is looking to invest in electrification and climate change mitigation. It has become obvious that the creation of a new industry standard not only attracts world-leading talent, but also major financial institutions that aim to align their strategy with long-term macro trends.”
— Emma Nehrenheim, Chief Environmental Officer at Northvolt
