Canadian pension plans among investors in battery maker's $1.2 billion funding round

BlackRock, Canada Pension Plan, OMERS, and others join funding round

Canadian pension plans among investors in battery maker's $1.2 billion funding round

Swedish lithium-ion battery manufacturer Northvolt has raised $1.2 billion in funding, receiving substantial backing from investors including BlackRock and several Canadian pension plans.  

The funding, acquired through a convertible note, is intended to facilitate the establishment of new manufacturing facilities in both Europe and North America, the company's finance chief told Reuters.  

Alongside BlackRock, leading contributors to the funding round included Canada Pension Plan, Ontario Municipal Employees Retirement System, and Investment Management Corporation of Ontario. Additional contributors included Goldman Sachs, Volkswagen, Baillie Gifford, Swedbank Robur, Singapore's GIC, and Hong Kong's Chow Tai Fook Enterprises. 

"It's a very capital intensive industry...-finding the right mix is always hard in this new greenfield kind of transitional projects," said Alexander Hartman, chief financial officer, as quoted in Reuters. 

A number of funds investing in the convertible note held a 'dark green' classification under the European Union's sustainable finance framework, reflecting their alignment with environmental priorities. This classification is anticipated to influence future interest in Northvolt, which ultimately harbors ambitions of becoming a publicly listed entity. 

"The battery manufacturing sector has attractive growth potential driven by the accelerating adoption of battery storage and electric vehicles," said David Giordano, global head of climate infrastructure at BlackRock. "As a leading investor in the energy transition, we look forward to supporting their continued growth." 

The funding will support the company's expansion of its manufacturing facilities, Hartman told Reuters.  

Currently maintaining several production sites across Europe, Northvolt recently announced an investment of 600 million euros in its new German plant.  

Sources familiar with the matter disclosed that Northvolt is nearing the finalization of plans to build a battery factory in Canada, with an anticipated announcement later this year. 

The recent funding round has elevated the company's total capital raised since 2017 to over $9 billion. Northvolt has also assembled its debut energy storage systems in Poland, and it anticipates commencing customer deliveries later this year. 

"We have a business plan...we always want to make sure we have access to the markets," Hartman said.