The EIB has approved a loan to the Swedish battery maker Northvolt to support construction of its demonstration line and research facility at Västerås
Swedish battery start-up Northvolt received a vote of confidence this week, as the European Investment Bank (EIB) approved a loan of up to 52.5 million euros (US$64.7 million) to finance its demonstration plant.
The project will be supported under InnovFin – the EU Finance for Innovators’s Energy Demonstration Projects (EDP) facility – which has the wider backing of the European Union under its Horizon 2020 programme.
Negotiations will now be finalised and the deal signed off. Northvolt is then expected to begin construction of its demonstration line at its site in Västerås within months.
The demonstration site includes a research facility and in total is expected to employ 300-400 people. It will also form a key step towards the establishment of a larger scale battery factory in Skellefteå in northern Sweden, eventually targeting 32 GWh worth of battery production annually. According to the EIB, the Västerås facility will demonstrate “the commercial viability of the concept and qualify and industrialise products.”
Northvolt held several funding rounds in 2017, and has received backing from utility Vattenfall as well as ABB, who will supply equipment and expertise in production. Total investment for the planned factory is estimated at around 4 billion euros (US$5 billion), and if the company breaks ground on the plant in 2018, it could deliver its first cells by late 2020.
EIB vice-president Ambroise Fayolle suggested that the funding was a strategic investment in European production capacity, noting that: “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.”
European Commission Vice President in charge of the Energy Union, Maroš Šefčovič, added: “Batteries are a strategic component of our competitiveness and to capture a new European market worth EUR 250 billion annually as of 2025, we need to act fast. I therefore welcome the decision taken by the EIB, which will help this industry-led project take off the ground. It is important to pool all available instruments at the national and European level, such as InnovFin. The European Battery Alliance will continue supporting prospective partnerships throughout the value chain.”
The loan agreement is the second tranche of financing the company has received over the past few weeks, having last month agreed a co-operation and offtake deal with truck manufacturer Scania. The automaker will invest 10 million euros (US$12.5 million) in the partnership, again to assist Northvolt in building its demonstration line and research facility. The two will also establish a joint team of technicians to work at the site.