The Investment Management Corporation of Ontario (IMCO) is to allocate $400m (€365m) into Swedish company Northvolt.
The Canadian firm, which manages $79bn of assets for public-sector entities and other clients, said the funding would enable the battery maker’s planned expansion. It referred to Northvolt’s first gigafactory in northern Sweden, which produces batteries using fossil-fuel electricity. Future gigafactory additions, it said, would support Northvolt’s goal of delivering 150 GWh of annual production capacity by 2030.
“This collaboration between IMCO’s Fundamental Equities and Global Infrastructure teams is paving the way for meaningful capital deployment towards the energy transition,” said Rossitsa Stoyanova, chief investment officer of IMCO. “With this investment, we are tangibly delivering on our Climate Action Plan, while also strategically managing material ESG risks, ultimately generating sustainable long-term value for our clients.”
The firm also published a joint interview about the deal with Michael Tsada, senior portfolio manager of fundamental equities and Matthew Mendes, managing director and head of infrastructure. “Our partnership with Northvolt not only reinforces our macroeconomic outlook for the battery sector but addresses a more fundamental issue: to drive down the carbon intensity and cost of the production of battery cells themselves,” said Mendes. “Given the strong barriers to entry, the significant progress the business has made commercially, and its strong focus to build the world’s greenest battery, this investment fits well within our portfolio.”
All this comes just weeks after Expert Investor wrote about how a Nordic-centred deal worth €2.3bn to generate onshore wind power in Finland had been struck. Back then, we noted that Northvolt had said it was going to invest in building a new ‘megafactory’ in Heide, Germany. Estimates put that investment at €600m, although the final decision still depends on whether subsidies are granted, said Northvolt.
This new deal, according to Reuters, means the group has now raised more than $8m in debt and equity in the last six years. $1.1bn of this, added Reuters, is in convertible notes raised in 2022. In February, it was reported the firm may be looking at an IPO this year that could value it at $20bn.