New York — Germany's Federal Ministry of Economics has pledged a state guarantee of $525 million to support the construction of Northvolt's battery cell factory in Skelleftea, northern Sweden.
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Register NowThe ministry said Aug. 17 that the Northvolt Ett gigafactory qualified for the federal, or UBK, guarantee, as it was a project with particular state interest in that it was important for the Germany automotive and electromobility sector.
It noted that German automotive makers Volkswagen and the BMW Group had a strategic cooperation with Northvolt for joint research and development, with the companies likely to use the batteries manufactured at the Northvolt Ett gigafactory for their electric vehicles (EVs).
It added that the project would also contribute to meeting the Paris climate goals, as the battery cells produced would have comparatively low CO2 emissions, due to the predominantly European delivery and supply chains, the planned in-house production of cathode material and the exclusive energy supply from hydropower.
"The Northvolt project is another important component in building a broad and stable value chain for electromobility in Germany and Europe," the ministry said.
The 100% clean energy-powered Northvolt Ett is due to be Northvolt's primary site for manufacturing of active material, cell assembly, recycling and auxiliaries, with large-scale manufacturing due to start in 2021 and annual capacity to ramp up to at least 32 GWh by 2024 and up to 40 GWh thereafter.
The ministry added that Northvolt Ett was also due to serves as a reference and pilot project for the upcoming Northvolt Zwei battery cell production facility in Salzgitter, a joint venture between Northvolt and Volkswagen expected to start operations in 2024.
Other financing for the gigafactory, which will be one of the largest battery cell production plants in Europe, will come from France, Japan, Korea and the European Investment Bank.
At the end of July, Northvolt raised $1.6 billion in debt through a consortium of commercial banks, pension funds and public financial institutions, bringing the total equity and debt available to support the development of Northvolt Ett and Northvolt Zwei up to $3 billion.