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Swedish battery startup Northvolt has secured Europe’s largest green bond to date. The $5 billion debt deal will help expand Skellefteå’s “gigafactory” to include the first fully integrated circular battery production facility outside of Asia.
The debt package was financed by the European Investment Bank (EIB) and the Nordic Investment Bank (both supported by the European Commission’s (EC) InvestEU program), as well as 23 other companies including JPMorgan Chase, Citi and BNP Paribas. provided by commercial banks.
It was raised on the back of deals worth $55 billion with BMW, Scania, Volvo and Volkswagen, and includes a refinancing of a $1.6 billion debt package raised in July 2020.
The EIB provided the bulk of the funding at $1 billion and has previously supported the Northvolt demonstration line in Västerås and the early stages of the Skellefteo plant with support from the EC.
“The importance of projects of this kind in achieving climate neutrality in Europe should not be underestimated and we are happy to continue supporting their expansion,” said EIB Vice-President Thomas Ostross. .
The agreement provides vision and intent for Europe’s battery industry, which is struggling to compete with the US and China.
“It is of strategic importance and a key battleground for global competitiveness. Our battery pioneer, Northvolt, is committed to helping the EU develop innovative, sustainable and globally competitive batteries. It shows that we have what it takes to build an ecosystem,” the Alliance commented in a statement. “I am proud of the Northvolt success story and the 160 other industrial projects that are taking shape across the value chain that are being promoted under the European Battery Alliance. The role of the EIB is essential. We need to be strategic, bold and agile.” Northvolt has now secured more than $13 billion in equity and debt to enable expansion in Europe and North America. This is the first loan raised through Northvolt’s Green Finance Framework, created in 2023. The company received the highest “dark green” rating from external rating agency Cicero, a first for its sector.
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