The European Investment Bank (EIB) said on 15 May that the Bank has given its in-principle agreement to support Northvolt’s gigafactory for lithium-ion battery cells in Skellefteå, Sweden, by a loan of €350 million.

Upon the conclusion of a loan agreement, the financing would be supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe, the EIB said.

European Commission Vice-President for the Energy Union Maroš Šefčovič reminded that the EIB and the Commission are strategic partners under the EU Battery Alliance. “I welcome the significant support proposed by the EIB to Northvolt gigafactory as a stepping-stone towards building a competitive, sustainable and innovative value chain, with battery cells manufactured at scale, here, in Europe. Our two institutions are working closely with the industry and the key Member States to put the EU on a firm path towards global leadership in this rapidly expanding sector,” he said.

EIB Vice-President Andrew McDowell noted that the development of a competitive and green battery value chain within Europe can not only cut greenhouse gas emissions by decarbonizing power generation and transport but can also help protect millions of well-paid jobs in European industries in the face of increasing global competition. “The 350 million euro loan to Northvolt approved in-principle today by our Board of Directors is the largest ever direct EIB financing approval for battery technology, and we look forward to working with Northvolt over the coming months to finalize contracts,” McDowell said.

Swedish Minister for Business, Industry and Innovation Ibrahim Baylan said the EIB’s decision is very gratifying and a big step towards a large-scale battery production in the EU and a fossil free welfare society. The decision shows that there are prerequisites in Sweden for sustainable battery production, it is important for Sweden and the rest of the EU to produce battery materials and battery cells, based on green, Swedish electricity,” he said.

The gigafactory will be established in Skellefteå in northern Sweden – a region home to a prominent raw material and mining cluster which has a long history of process manufacturing and recycling. Noting the region’s clean power base, building the factory in northern Sweden will enable Northvolt to utilize 100% renewable energy within its production processes.

Northvolt Ett will serve as Northvolt’s primary production site, hosting active material preparation, cell assembly, recycling and auxiliaries. The construction of the first quarter of the factory will be completed in 2020. Ramping up to full capacity, Northvolt Ett will produce 32 GWh of battery capacity per year.

Northvolt CEO and co-founder Peter Carlsson said that this EIB in principle approval is a key moment in the process of finalizing the Bank’s capital raise to support the establishment of Northvolt Ett. “Today, we are one step closer to our goal of building the greenest batteries in the world and enabling the European transition to a decarbonized future,” he said.

The capital raise, in which this EIB loan would be included, will finance the establishment of the first 16 GWh of battery capacity production. The batteries from Northvolt Ett are targeted for use in automotive, grid storage, and industrial and portable applications.