APG, PFA and Danica Support $ 1.6 Billion Debt Financing for Lithium-Ion Batteries | New
European retirement heavyweights PFA, Danica Pension and APG have invested in a $ 1.6 billion (€ 1.4 billion) financial package for Swedish lithium-ion battery maker Northvolt as part of a consortium of global investors comprising banks and public financial institutions.
Danica Pension, the retirement arm of Danske Bank, revealed that it had invested around 837 million Danish kroner (112.5 million euros), and a spokesperson for PFA told IPE that the mutual pension fund commercial had invested the same amount.
The funding takes the form of a subordinated loan and aims to support Northvolt’s development of two lithium-ion battery giga factories and investments in research and development, industrialization and recycling, according to the Swedish company.
Northvolt batteries are a key part of electric vehicles.
Peter Tind Larsen, Head of Alternative Investments at PFA, said: “We believe that electric vehicles will play a major role for many years to come in terms of reducing CO2 emissions from the transport sector.
Northvolt said it aims for 50% of raw materials to be derived from recycled batteries.
Ole Krogh Petersen, Managing Director of Danica Pension, said he expected the investment to deliver strong returns, while contributing to the green transition.
“With their batteries for electric cars, Northvolt will play a major role in the transport sector’s transition from fossil fuels to sustainable forms of energy,” he said.
A spokesperson for APG said the company decided to invest in increasing Northvolt’s debt because it expected a good return. The loan also fits well with the goal of its client, the ABP pension fund, to increase the share of green investments in its portfolio, he said.
“It is also an example of the opportunities we see in private markets besides investing in public markets,” he said.
He declined to disclose the size of the Dutch pension manager’s investment in debt.