The European Investment Bank (EIB) has approved a €52.5m loan to Swedish start-up Northvolt to establish a battery manufacturing facility.
The loan is being provided under InnovFin – EU Finance for Innovators’s Energy Demonstration Projects. The financial backing is being provided from European Union under Horizon 2020 Financial Instruments.
After the completion of financial negotiations between EIB and Northvolt, the company is expected to start the construction of a demonstration line in the coming months.
The facility, which will be located in Västerås, Sweden, is expected to show the commercial viability of the concept. It will qualify and industrialize products together with Northvolt’s customers.
Batteries produced from the facility will be targeted for use in transportation, stationary storage and for industrial and consumer applications.
Northvolt CEO Peter Carlsson said: "Europe is moving rapidly towards electrification. Northvolt’s objective is to build the world’s greenest battery to enable the transition.
“With the support from the European Investment Bank and the European Union, we are now one step closer to establishing a competitive European battery manufacturing value chain."
The facility will also include a research facility and will employ a work force between 300 and 400.
The launch of the demonstration plant is seen as a major step towards the establishment of Northvolt’s large-scale li-ion battery factory in Skellefteå, with a target of producing 32GWh of battery capacity annually.
EIB vice-president Ambroise Fayolle said: "The Bank is fulfilling one of its main purposes by supporting this type of research and development in Europe. With the growing momentum of clean energy and electric mobility, batteries will become ever more important.
“Europe is currently lagging behind when it comes to battery manufacturing and this highly innovative and strategic project deserves European backing to fill that gap."
Established in 2016, Northvolt is aiming to produce batteries with minimal carbon footprint and to speed up Europe’s transition to renewable energy. In 2018, the company aims to construct a lithium-ion battery factory in Skellefteå in the north of Sweden.
The facility's activities will include active material preparation, cell assembly, recycling and auxiliaries. The company is expected to employ a total of 2000-2500 people for the Skellefteå operations.