Swedish battery manufacturer Northvolt has successfully secured a 4,6 billion debt financing round aimed at bolstering its production capabilities and accelerating its growth.

The loan was granted by 23 commercial banks, the Nordic Investment Bank  and the European Investment Bank (EIB). According to the EIB it is the largest ‘green loan’ ever given in Europe to a company. This substantial financial backing underscores the increasing investor confidence in the potential of the electric vehicle (EV) battery market, and the broader push towards cleaner energy and sustainable transportation.

The financing will primarily enable the expansion of Northvolt’s ‘gigafactory’, Northvolt Ett, located in northern Sweden. The company also plans to use the funds to expand its recycling efforts. The green loan is among the largest on record, and comes at a time when Northvolt is setting up new cell plants in Germany and Canada and has fallen slightly behind its production milestones. However, the company remains optimistic about its growth trajectory.

Northvolt is a key player in European efforts to establish an EV supply chain that can rival those in Asia and the United States. This investment will further strengthen its position and enable it to meet the rapidly increasing demand for EV batteries. Northvolt has announced long-term offtake contracts amounting to over 55 billion dollars with partners including BMW, Scania, Volvo Cars, and Volkswagen Group, underscoring the significance of its role in the EV sector.

The successful financing round for Northvolt is indicative of a broader trend in the business landscape. Businesses involved in clean technology and renewable energy are gaining momentum, partly spurred by governmental policies favoring a shift away from fossil fuels. The financing package means that Northvolt has now secured more than 13 billion dollars in equity and debt, positioning it well for future expansion in Europe and North America.