​AP funds, ATP, AMF in Swedish green battery firm’s $2.75bn placement

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Nordic pension giants including ATP, AMF and Swedish state pension buffer funds AP1-4 have taken part in a $2.75bn (€2.25bn) capital-raising round to expand the production capacity of Swedish lithium-ion battery maker Northvolt, according to announcements from those involved.

The four AP funds co-led the equity private placement with Canadian pension fund unit OMERS Capital Markets, Northvolt said, alongside existing investors Goldman Sachs Asset Management and Volkswagen Group.

AP1, AP2, AP3 and AP4, which were investing for the first time in Northvolt, bought into the company with a $400m investment via their jointly-owned firm 4 to 1 Investments.

Swedish pension fund AMF also invested, ramping up the initial investment it made two years ago by SEK640m (€63.6m) to SEK1.1bn.

Denmark’s ATP – the only Danish investor currently involved in the equity raise – also added to its 2019 investment in the firm, putting in another DKK900m (€121m), bringing its investment in Northvolt to DKK1.5bn.

AMF said its stake in Northvolt now amounted to just over 3% of the company’s shares.

Bo Foged, chief executive officer of ATP, said: “We have been involved from the start two years ago and it has obviously not been without risk, but Northvolt breathes sustainability into the entire value chain and that fits perfectly with our own ambition, where we want to contribute to the green transition while also making a good return.”

Northvolt said it was planning to increase the production capacity of its Swedish gigafactory, Northvolt Ett, to 60gwh annually from 40gwh, adding that it had secured more than $27bn worth of contracts from customers, including BMW, Fluence, Scania and Volkswagen.

The green battery firm said including the equity placement, it had now raised over $6.5bn in equity and debt to support its expansion plan, under which it was aiming to lift its total production capacity to 150gwh annually in Europe by 2030 to meet increased customer demand.

Anders Oscarsson, head of equities at AMF, said: “It isn’t hard to be impressed by the drive and forward-thinking spirit of Northvolt, and by the progress made during the two years we have followed the company closely as a partner.”

Northvolt said it was planning to build at least two more factories in Europe over the coming decade, and was exploring the possibility of building the next one in Germany.

It said its plan also included establishing recycling facilities, enabling 50% of all its future raw material requirements to be sourced from recycled batteries by 2030.

Peter Carlsson, co-founder and CEO of Northvolt, said: “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.”

The then start-up battery company announced its initial financing round of $1bn in June 2019, which was backed by AMF, to the tune of SEK740m, ATP, investing DKK650m, and Swedish pensions and insurance group Folksam, which invested SEK200m.

The following year, large European pension providers PFA, Danica Pension and APG, took part in a $1.6bn debt financing for Northvolt.