​AMF, ATP, Folksam Join $1bn Capital Raise For Swedish Green Battery Firm

Three major Nordic pension funds have backed a $1bn (€886m) capital raising for Swedish lithium-ion battery maker Northvolt, led by Goldman Sachs and Volkswagen.

Sweden’s AMF and Denmark’s ATP announced investments of SEK740m (€69m) and DKK650m (€87m) respectively in the start-up company, which said it would use the equity to “enable Europe’s first homegrown gigafactories for lithium-ion batteries”.

Folksam, the Swedish pensions and insurance group, said it put SEK200m into the company via the capital raising.

With debt financing to be provided by the European Investment Bank and other lenders, Northvolt said funding was in place to set up the initial 16 gigawatt hours of lithium-ion battery cell manufacturing capacity at its Northvolt Ett factory.

Construction of the the factory in Skellefteå in north-east Sweden was due to start in August, with production scheduled to begin in 2021, it said.

Ulrik Weuder, head of alternative investments at ATP, said: “With the investment in Northvolt, we can be involved in promoting the development of a green car industry and create a good return for our members – that is a match we really like.”

He said the car industry was undergoing a transformation and both the development of and demand for electric cars was rising strongly, which increased the need for lithium batteries.

Weuder said that, with the local hydro-electric power plant providing electricity for Northvolt’s battery production, the CO2 burden of the development was being significantly reduced.

Tomas Flodén, AMF’s CIO, said the pension fund aimed to be a long-term owner of Northvolt, after taking a 5% stake. “It feels particularly good to be part of a Swedish industrial investment of this size,” he said. “The investment has the potential to be good not only for our savers, but also for Sweden at large.”

Michael Kjeller, Folksam’s CIO, added: “The investment will yield profits economically, environmentally as well as for the local community.”

Folksam said the investment would be divided equally within the group between the life and pensions arm Folksam Liv, non-life arm Folksam Sak and the pension fund KPA.

Other investors in Northvolt included German carmaker BMW and the IMAS Foundation, a sister foundation to the INGKA Foundation, the indirect owner of IKEA.