Swedish Battery Maker Northvolt Raises $1.1B for Expansion in Europe

By Mario Marroquin

Swedish battery manufacturer Northvolt has secured investments from numerous pension funds, including ATP of Denmark and the Swedish National Pension (AP), as well as international investors including Goldman Sachs Asset Management and Volkswagen.

Northvolt, which plans to deliver $55 billion in orders to numerous European carmakers and go public via initial public offering in the next two years, placed a $1.1 billion convertible note with the following investors:

·         AMF ($29.5 million)

·         AP Funds 1-4

·         Ava Investors

·         Baillie Gifford

·         Compagnia di San Paolo through Fondaco Growth

·         Folksam Group

·         Goldman Sachs Asset Management

·         IMAS Foundation

·         Olympia Group

·         OMERS Capital Markets

·         PCS Holding

·         Swedbank Robur

·         TM Capital

·         Volkswagen Group

“The combination of political decision making, customers committing even more firmly to the transition to electric vehicles, and a very rapid rise in consumer demand for cleaner products, has created a perfect storm for electrification,” Northvolt CEO and cofounder Peter Carlsson said in a prepared statement.

Northvolt said resources from the note placement will be used to expand cathode and battery production facilities in Europe.

This year, the battery manufacturer announced a joint venture with Volvo for a 50 GWh battery manufacturing facility in Gothenburg, Sweden, and plans to add a 60 GWh battery manufacturing facility in Schleswig-Holstein, Germany.

Northvolt also intends to expand capacity at its facility in Skelleftea, Sweden, and develop a new cathode facility in Borlange.

AMF, which owns approximately 3% of Northvolt’s shares, previously invested SEK 1.1 billion ($104.7 million) in the battery manufacturer.

OMERS Capital Markets, which invests on behalf of the $105 billion Canadian pension plan, agreed to a $250 million term loan facility for another automotive manufacturer firm – AGP Group of Belgium – in April.

AGP plans to fund the expansion of manufacturing capabilities in North America. BMO Financial Group funded the facility alongside AGP and OMERS.

“We are particularly excited by AGP’s pipeline of opportunities related to the global transition to electric vehicles,” Michael Block, a senior managing director for OMERS Capital Markets, said in a statement in April. 

OMERS Infrastructure and APG agreed to acquire clean energy conglomerate Groendus based in Utrecht in May. Groendus said it plans to enter the consumer energy storage market and smart charging in the coming years.

Northvolt has raised $8 billion in debt and equity since 2017. ATP, which invested $55.1 million in the third round of fundraising, raised its total investment to $262 million in the battery manufacturer.

In June 2021, the Swedish National Pension (AP) fund provided $400 million to the battery manufacturer as part of a $2.8 billion private placement.