Sweden's Northvolt raises $1 bln to complete funding for mammoth battery plant
* Battery maker completes $1 bln equity capital raise
* Capital raise led by Volkswagen and Goldman Sachs
* BMW and IKEA-linked foundation also among investors
* Funding round enables establishment of Skelleftea
(Adds Northvolt CEO interview, detail, background)
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM, June 12 (Reuters) - Automakers Volkswagen
and BMW are among the investors in
Europe's biggest lithium-ion battery plant, Sweden's Northvolt
said on Wednesday after it raised $1 billion in equity capital
to complete funding for the facility.
Northvolt said construction of the plant in Skelleftea in
northern Sweden would begin in August, to provide an initial 16
GWh of cell manufacturing capacity. It added it had already sold
a significant part of planned production volumes at a combined
order value of more than $13 billion through 2030.
The plant is one of Sweden's biggest industrial projects in
decades and will play an integral part in European efforts to
compete with Asian rivals such as CATL, Samsung
and LG Chem, which are leaders in the
battery market after locking in supply deals with carmakers.
"Today is not only a great milestone for Northvolt, it also
marks a key moment for Europe that clearly shows that we are
ready to compete in the coming wave of electrification,"
Northvolt CEO and former Tesla executive Peter Carlsson
Carlsson told reporters at Northvolt's headquarters in
central Stockholm that production would begin in 2021 at the
Skelleftea plant, named "Northvolt Ett" - "Northvolt One" in
Swedish - in a nod to Tesla's numerically named Gigafactories in
the United States and soon, China.
"From a longer-term perspective, we will be in a constant
financing process. If we want to be one of the bigger players in
Europe in 2030 we will need to build up towards 150 GWh of
capacity," Carlsson said.
Funding for a project set to cost billions of euros, which
envisages the Swedish plant eventually reaching a capacity of
at least 32 GWh, had been seen as challenging by some investors
despite political and business support in the Nordic country.
Those fears have been laid to rest with big European
industrial players coming on board along with international and
domestic financial investors.
Swedish pension fund firms AMF and Folksam and IKEA-linked
IMAS Foundation also contributed to the equity capital raising,
which was led by Goldman Sachs and VW, Northvolt said.
The European Investment Bank is among the project's lenders
and will provide a 350 million euro loan, its largest ever
direct financing of battery technology.
Volkswagen said separately it was buying about 20 percent of
the shares in the Swedish battery cell producer, with the start
of battery production for the carmaker planned for the end of
2023 or early 2024.
The start-up, co-founded by Carlsson, is also setting up a
joint venture with Volkswagen to build a second battery plant in
Salzgitter, Germany. Including its direct investment in
Northvolt, Volkswagen was investing 900 million euros ($1.02
billion), the automaker said.
($1 = 0.8841 euros)
(Additional reporting by Anna Ringstrom; Editing by Kirsten
First Published: 2019-06-12 14:35:37
Updated 2019-06-12 16:55:52
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