EU to support Northvolt’s European battery project with InnovFin loan
The Board of Directors of the European Investment Bank (EIB) has approved a loan request from Sweden-based battery developers Northvolt AB. The financing, a facility of up to EUR 52.5 million, is projected to be supported by InnovFin – EU Finance for Innovators’s Energy Demonstration Projects facility, with the financial backing of the European Union (EU) under Horizon 2020 Financial Instruments.
According to a statement February 12, the parties will now finalise negotiations and, after signature, Northvolt is expected to begin construction of its demonstration line in the coming months.
The Bank is fulfilling one of its main purposes by supporting this type of research and development in Europe. 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 highly innovative and strategic project deserves European backing to fill that gap, said Ambroise Fayolle, Vice-President of the EIB.
This facility will serve to show the commercial viability of the concept and to qualify and industrialize products together with Northvolt’s customers. The produced batteries are targeted for use in transport, stationary storage, and industrial and consumer applications.
Europe is moving rapidly towards electrification. Northvolt’s objective is to build the world’s greenest battery to enable the transition. With the support from the European Investment Bank and the European Union, we are now one step closer to establishing a competitive European battery manufacturing value chain, said Peter Carlsson, CEO of Northvolt.
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.
Vice President of the European Commission in charge of the Energy Union Maroš Šefčovič welcomed the decision by the EIB and said that batteries are a “strategic component of our competitiveness and to capture a new European market worth EUR 250 billion annually as of 2025”.
EC Commissioner Carlos Moedas, in charge of Research, Science and Innovation, noted that with 40 percent of all patents for renewable technologies belonging to European companies, the EU is “undoubtedly leading the fight” against climate change.
But many of Europe’s great innovations in clean energy technologies end up being produced elsewhere, meaning that others make much more money out of European innovations than we do. Today’s decision will help to correct this, said Moedas.
InnovFin Energy Demonstration Projects provides loans, loan guarantees or equity-type financing typically between EUR 7.5 million and EUR 75 million to innovative demonstration projects in the fields of energy system transformation.
These include but are 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 European Investment Bank (EIB).