Swedish battery manufacturer Northvolt has secured a $5bn (Skr52.31bn) non-recourse project financing deal for the expansion of the first circular gigafactory in the country.

The money will be used to fund the expansion of Northvolt Ett, the company’s primary facility in northern Sweden, and will also support the growth of its adjacent recycling plant, Revolt Ett.

Northvolt co-founder and CEO Peter Carlsson stated: “This financing is a milestone for the European energy transition. It will enable us to realise the full potential of Northvolt Ett and demonstrates that circular, sustainable business practices are fundamental to success in today’s industry.”

The expansion of Northvolt Ett will enhance cathode production and cell manufacturing capabilities.

Revolt Ett, nearing the end of its commissioning phase, is already processing its initial materials.

The recycling facility has a carbon footprint 70% lower than that of mined raw materials, establishing a fully integrated, circular battery production model unprecedented outside Asia.

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A consortium of 23 commercial banks, along with the European Investment Bank and the Nordic Investment Bank, both supported by the European Commission’s InvestEU programme, provided the loan.

A considerable portion of the commercial facilities benefits from guarantees and direct funding from the Swedish National Debt Office, Euler Hermes, the Export-Import Bank of Korea, Nippon Export and Investment Insurance and the Korea Trade Insurance Corporation.

This landmark financing is the first to be raised under Northvolt’s Green Finance Framework, established in 2023.

Northvolt’s total secured funding for its expansion in Europe and North America now exceeds $13bn.

Northvolt CFO Alexander Hartman stated: “This has been an incredible team effort, involving long due diligence processes, new partnerships with strong institutions and developing cutting edge financing structures focused on sustainability – all to close one of the largest green financing deals in history.”