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    AP Funds Invest In Northvolt

    Stockholm (NordSIP) – According to a joint announcement by the Swedish National Pension (AP) Funds, 4 to 1 Investments KB, a company jointly owned by AP1, AP2, AP3 and AP4 invested US$400 million in Northvolt, as part of a US$2.75 billion private placement. The private placement was conducted to finance further battery cell production capacity and R&D efforts.

    Northvolt is planning for large-scale manufacture in Europe of lithium-ion batteries for electric vehicles, and has entered into partnerships with Volkswagen, BMW, Scania and others. “The new share issue enables completion of the company’s first battery production plant in Skellefteå, northern Sweden,” the AP funds added.

    “The AP Funds are jointly financing an important long-term industrial project in Sweden,” Kristin Magnusson Bernard, CEO of AP1, Eva Halvarsson, CEO of AP2, Kerstin Hessius, CEO of AP3 and Niklas Ekvall, CEO of AP4, said in a joint statement. “The investment is fully in line with the AP Funds’ long-term strategy of investing in companies that we deem to have good future financial prospects. With the AP Funds’ long-term remit and Northvolt’s important role as a transformative force in the global climate transition, we believe this investment will make a positive contribution both to the pension system and to society at large. We are making the investment in the jointly owned AP Fund company, 4 to 1 Investments.”

    Beyond the support of the AP Funds, Northvolt was also able to count on funding from OMERS, one of Canada’s largest defined benefit pension plans, as well as from existing investors Goldman Sachs Asset Management and Volkswagen Group. Also participating in the equity raise are current owners AMF, ATP, Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Compagnia di San Paolo through Fondaco Growth, Cristina Stenbeck, Daniel Ek, IMAS Foundation, EIT InnoEnergy, Norrsken VC, PCS Holding, Scania and Stena Metall Finans. Goldman Sachs Bank Europe SE and Morgan Stanley & Co. International plc act as financial advisors to Northvolt.

    “We have a solid base of world-class investors and customers on-board who share Northvolt’s mission of building the world’s greenest battery to enable the European transition to renewable energy,” Peter Carlsson, Co-Founder and CEO of Northvolt, commented. “We have been producing cells at our cell industrialization facility, Northvolt Labs, for more than a year and are excited to now bring the knowledge and technology we have developed to the north and start large-scale production,” Carlsson added.

    Following this private placement, Northvolt has now raised more than US$6.5 billion in equity and debt to enable an expansion plan leading up to and beyond 150 GWh of deployed annual production capacity in Europe by 2030. Northvolt also reports securing contracts in excess of US$27 billion from key customers, including BMW, Fluence, Scania and Volkswagen. The company’s plan also establishes recycling capabilities to enable 50% of all its raw material requirements to be sourced from recycled batteries by 2030.

    “This is a new European industry in the making and it will require significant investments over the coming decade. It is encouraging to see that the investor community has identified the opportunity early, and we hope to see more investments throughout the value chain over the coming years,” said Alexander Hartman, CFO of Northvolt.

    Following a US$14 billion order from Volkswagen announced earlier this year, Northvolt’s first gigafactory, Northvolt Ett, in Skellefteå, Sweden, will be expanded from the earlier plan of 40 GWh to 60 GWh of annual production capacity. To meet its 150 GWh target of deployed annual production capacity in Europe by 2030, Northvolt currently anticipates building at least two more gigafactories in Europe over the coming decade, ideally in Germany.

    Image Courtesy of Northvolt

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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