In a significant move for sustainable industry, Northvolt has secured a $5 billion green loan, the largest of its kind in Europe. This funding is set to bolster the expansion of Europe’s first circular gigafactory, Northvolt Ett, located in northern Sweden. The announcement marks a pivotal step in advancing the region’s battery recycling capabilities and sustainable manufacturing practices.
The financing will enable Northvolt Ett to increase its cathode production and cell manufacturing. Furthermore, it will support the growth of the adjacent recycling facility, Revolt Ett. This facility is unique in its ability to recover battery-grade metals with a 70% lower carbon footprint than traditional mined materials. This approach underpins a fully integrated, circular battery production model, a first for the Western world, previously only seen in Asia.
Peter Carlsson, the Co-Founder and CEO of Northvolt, emphasized the importance of this development. He stated, “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.”
The financing includes a refinancing portion of a previous $1.6 billion package from July 2020. It is backed by long-term contracts worth over $55 billion with key partners such as BMW, Scania, Volvo Cars, and Volkswagen Group. The loan consortium comprises 23 commercial banks, the European Investment Bank (EIB), and the Nordic Investment Bank (NIB), supported by the European Commission’s InvestEU programme.
A notable aspect of the financing is the involvement of various national and international bodies. 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) provide guarantees and direct funding.
Alexander Hartman, Northvolt’s CFO, acknowledged the effort behind this achievement. “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.”
Northvolt’s commitment to sustainability is further evidenced by its Green Finance Framework, established in 2023. This framework received the highest ‘dark green’ rating from CICERO, making Northvolt the first in its sector to achieve such a distinction.
Emma Nehrenheim, Northvolt’s Chief Environmental Officer, commented on the broader impact of this initiative. “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.”
This package brings Northvolt’s total secured funding to over $13 billion, supporting its expansion in Europe and North America. The company acknowledges BNP Paribas, Allen & Overy, and Mannheimer Swartling for their advisory roles in this financing.
About Northvolt: Founded in Stockholm in 2016, Northvolt pioneers sustainable battery manufacturing. With $55 billion in customer orders, it operates Northvolt Ett in Skellefteå, Sweden, and Northvolt Labs in Västerås, Sweden, employing over 5,000 across multiple countries.
