Northvolt, a Sweden-based manufacturer of lithium-ion batteries, has announced raising $1.2 billion in convertible notes to support its expansion plans across Europe and North America.

The latest funding represents an extension of the $1.1 billion convertible note that was initially signed in July 2022. This financial injection has garnered investments from funds characterized as “dark green,” aligning with Article 9 of the EU’s Sustainable Finance Disclosure Regulation (SFDR).

Key players leading this extension include the Investment Management Corporation of Ontario (IMCO), BlackRock, Canada Pension Plan Investment Board (CPP Investments), and the financial partner OMERS, marking its third significant investment in Northvolt.

Peter Carlsson, Co-Founder and CEO of Northvolt, said that the mounting interest from capital markets underscores Northvolt’s capacity to meet the surging demand for sustainable battery solutions on both sides of the Atlantic.

Carlsson remarked, “The commitment to global decarbonization is strong, and these milestones reinforce our position to meet the massive demand for sustainable battery solutions both in Europe and North America.”

The recent funding extension has propelled the total convertible round to $2.3 billion, with numerous investors rallying behind Northvolt’s vision, including entities such as Goldman Sachs Asset Management, AP funds 1-4 (via the jointly owned company 4 to 1 Investments), Folksam Group, ATP, and Volkswagen Group.

With this substantial capital infusion, Northvolt has secured over $9 billion in equity and debt to fulfill orders exceeding $55 billion from key clientele, including BMW, Fluence, Scania, Volvo Cars, and Volkswagen Group.

Northvolt’s battery cells currently originate from Northvolt Labs in Västerås, Sweden, and Northvolt Cuberg in San Leandro, California, USA.

Northvolt Dwa, the company’s 25,000-square-meter cells-to-battery integration facility in Gdańsk, Poland, recently assembled its premier energy storage system (ESS) products. The facility caters to energy storage and industrial sectors and was funded by the European Innovation Fund.

The momentum for battery cell manufacturing is accelerating at Northvolt Ett gigafactory in Sweden, a facility that will soon be joined by an adjacent giga-scale recycling plant, Revolt Ett, which is set to commence operations later this year.

The company’s key projects include ramping up and expanding the Northvolt Ett Gigafactory, while it targets the establishment of the Northvolt Volvo Cars joint venture gigafactory in Gothenburg, Sweden. The manufacturer also plans to set up its third Gigafactoryin Heide, Germany, while it aims to establish Northvolt Fem, a cathode factory, in Borlänge, Sweden.

According to Mercom Capital Group’s 1H and Q2 2023 Funding and M&A Report Storage and Grid Report, the corporate funding for energy storage companies reached an impressive $7.1 billion across 59 deals during the first half of 2023.