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Northvolt, a battery manufacturer, received a $400 million investment from the Investment Management Corporation of Ontario (IMCO), a Canadian pension fund manager, in collaboration with Global Infrastructure Groups. The investment was converted into notes and will support Northvolt’s expansion plans.

Northvolt aims to deliver batteries with an 80% lower carbon footprint. The company operates a recycling facility that recovers used batteries and turns them into raw materials for new ones.

“We’re excited to partner with IMCO’s Fundamental Equities and Global Infrastructure teams to build the future of clean energy together,” said Alexander Hartman, CFO of Northvolt. “This investment fuels our expansion efforts, allowing us to further extend our global footprint and drive sustainable progress in our mission to deliver the world’s greenest battery.”

The company’s gigafactory, located in Sweden, has started producing batteries and is expected to reach an annual capacity of 40 gigawatt-hours (GWh) by 2024. Northvolt plans to build more gigafactories across Europe, with a target of reaching 150 GWh of annual capacity by 2030. The company has also partnered with several European automakers and industrial players, such as Volkswagen, BMW, Scania, Volvo, and Polestar, and has secured supply deals worth $55 billion.

“This innovative 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 strategically managing material ESG risks, ultimately generating sustainable long-term value for our clients.”

Last year, the company signed a $1.1 billion convertible note to finance its expansion of battery cell and cathode material production in Europe to support the rapidly expanding demand for batteries.

According to Mercom’s Q1 2023 Funding and M&A Report for Storage and Smart Grid, Total corporate funding—including venture capital (VC) funding, debt financing, and public market financing—in Energy Storage came to $2.2 billion in 27 deals compared to $4.3 billion in 31 deals in Q4 2022. Funding decreased significantly year-over-year (YoY) compared to $12.9 billion in 27 deals in Q1 2022.