Swedish lithium-ion battery producer, Northvolt, has successfully raised $1.2 billion in funding, bolstered by investments from major players including BlackRock and prominent Canadian pension plans. The company aims to utilize this capital injection to establish new manufacturing facilities across Europe and North America. This funding surge arrives in tandem with growing investor interest in enterprises poised to thrive in the era of low-carbon economies, spurred by policy initiatives supporting rapid transitions.
Chief Financial Officer Alexander Hartman stated that the battery manufacturing sector necessitates substantial capital investments, particularly in novel projects associated with the shift towards green initiatives. The challenge lies in striking the right balance in these fledgling endeavors.
Leading the investment round alongside BlackRock, the world’s largest asset management company, were notable entities such as the Canada Pension Plan, Ontario Municipal Employees Retirement System, and the Investment Management Corporation of Ontario, as previously reported.
David Giordano, Global Head of Climate Infrastructure at BlackRock, highlighted the battery manufacturing sector’s promising growth potential driven by escalating adoption of battery storage solutions and electric vehicles. BlackRock, a pivotal investor in the global energy transition, expressed its enthusiasm for supporting Northvolt’s continuous expansion.
Additional investors joining the funding efforts encompassed renowned names including Goldman Sachs, Volkswagen, Baillie Gifford, Swedbank Robur, Singapore’s GIC, and Hong Kong-based Chow Tai Fook Enterprises.
Several funds participating in this investment were classified as ‘dark green’ under the European Union’s sustainable finance framework. This classification signifies a commendable commitment to environmental sustainability, hinting at favorable future prospects for the company. Northvolt ultimately envisions a public listing, as indicated by Hartman.
The influx of funds is set to facilitate Northvolt’s ambitious plans for expanding its factory network. Currently, the company maintains multiple factories throughout Europe, including a significant 600 million euros ($654 million) investment aimed at establishing a plant in Germany, an announcement made in May.
While Northvolt already operates a facility in the United States, insiders suggest that the company is on the verge of finalizing arrangements for a substantial battery factory in Canada. This impending announcement is anticipated later this year. Nevertheless, Northvolt declined to provide any specific details regarding these factory plans.
This latest funding round marks a significant milestone for Northvolt, propelling the company’s total raised capital, spanning both debt and equity, to over $9 billion since 2017. The objective behind this financial endeavor is to position Northvolt as the preeminent battery manufacturer in Europe. Noteworthy clients, including BMW, Fluence, Scania, Volvo Cars, and Volkswagen, have already committed orders totaling over $55 billion.
In a separate development, Northvolt has successfully assembled its inaugural energy storage system products in Poland. The company anticipates commencing customer deliveries later in the year. While Northvolt’s business strategy remains steadfast, Hartman refrained from commenting on the prospect of the company going public in the near future.