The German Bundestag’s budget committee has approved an additional 600 million euros for the siting of a battery factory by the Swedish company Northvolt. It concerns a convertible bond subject to repayment, which will be paid out by KfW Bank and for which the federal government will assume liability, announced parliament members Felix Banaszak and Bruno Hönel.
The planned Northvolt Drei battery factory in Heide was announced in March 2022. Accordingly, construction should begin in 2025, with 3,000 jobs to be created in the final phase. The production capacity is 60 gigawatt hours, which should be enough for one million electric cars. In addition to battery production, Northvolt also aims to have a battery recycling plant on site. Less than two months later, in May 2022, the company received the IPCEI funding notice.
According to the funding notice, Germany is supporting Northvolt with more than 155 million euros. Of that, 70 percent, or about 108 million euros, comes from the federal budget, while 30 percent, or about 46 million euros, is contributed by the state of Schleswig-Holstein. That was the maximum approved by the EU, Habeck said at the time.
The convertible bond secured by the federal government is intended to support the project beyond the 155 million euros in funding. The funding is to be based on the EU’s new Temporary Crisis and Transition Framework (TCTF). Therefore, the EU Commission still has to approve the funding. If this is the case, the TCTF will be applied in Germany for the first time.