ING co-leads consortium to give sustainable battery producer Northvolt a $1.6 billion boost to accelerate the electrification of transportation.

ING has added to its fast-growing portfolio of sustainable loans, becoming a lead lender in a $1.6 billion debt financing package for Sweden’s Northvolt. The debt raise will enable the creation of Europe’s first home-grown gigafactory for lithium-ion batteries.

The package – provided by a consortium of leading commercial banks, pension funds and public financial institutions – increases the total amount Northvolt has raised to date to more than $3 billion.

A key player in the energy transition, Northvolt is a battery developer and manufacturer specialising in lithium-ion technology for electric vehicles. Northvolt sets itself apart from other battery manufacturers by manufacturing batteries in the most sustainable way possible, using renewable energy and the ambition to maximise the use of raw materials secured from recycled batteries.

The consortium includes 12 other commercial banks, as well as the European Investment Bank, the Export-Import Bank of Korea, and export credit agencies Euler Hermes, BPI France, and NEXI.

A green energy future

The financing will support the development of the gigafactory Northvolt Ett in Skellefteå, Sweden. Northvolt is also making significant investments in battery cell technology, process development and recycling at the recently established industrialisation factory, Northvolt Labs, in Västerås, Sweden.

“We congratulate Northvolt on reaching this important milestone and eagerly anticipate the future this step will help usher in,” says Diederik van den Berg, Global Lead Renewables & Power, Energy at ING. “As a leading bank in financing the energy transition, ING is excited to be part of this first chapter of the Northvolt story; we look forward to supporting the company in its ambition to transform the battery production industry.”

The fact that world-class financial institutions are supporting a new industry in Europe is a clear sign of where the markets are headed and the opportunity that brings for sustainable investments, says Peter Carlsson, CEO and co-founder of Northvolt. “Europe needs to build a fully regionalised value chain for batteries, which has to be supported by further significant investments from both the public and private sectors over the coming years.”

Sector expertise

ING helped make the transaction possible with its unique expertise in the energy sector at large, and its leading track record in limited recourse financing in particular.

“ING’s sector expertise across the battery production value chain (ranging from metals & mining to automotive, and from energy to export finance) helped us shape a uniquely innovative financing structure befitting Northvolt’s ambitions,” says Tim van Pelt, Director, Renewables & Power, Energy at ING.

“We are proud to have played a pivotal role in this transaction, which is important for the energy transition, providing senior debt financing to Northvolt Ett as Mandated Lead Arranger and Senior Lender, as well as providing second lien financing through ING’s Sustainable Investment Fund.”

After last year supporting Scottish based GreenPower International, Northvolt is the second participation outside the Benelux for ING Sustainable Investments. According to Mark Weustink, head of Sustainable Investments: “Northvolt is an illustrative and great example of how Sustainable Investments supports its clients with risk bearing capital during their scale-up, helping them accelerate and realise their sustainable ambitions.”