The Investment Management Corporation of Ontario (IMCO) is investing US$400m (€366m) in Northvolt, a Swedish integrated battery platform focused on the research and development, manufacturing and recycling of sustainable battery cells and systems.
The investment by IMCO, which manages C$73.3bn (€50.8bn) of assets on behalf of public-sector institutions in Ontario, will fund a global expansion of Northvolt.
The company intends to offer the world’s greenest and lowest-carbon-footprint batteries, designed for use in electric vehicles, industrial processes and energy-storage systems.
IMCO is investing in Northvolt via both its global infrastructure and fundamental equities investments programmes, both of which have climate-change management and net-zero transitions as priorities, it said.
Rossitsa Stoyanova, chief investment officer of IMCO, said: “This innovative collaboration between IMCO’s fundamental equities and global infrastructure teams is paving the way for meaningful capital deployment towards the energy transition.
“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 investment also falls under IMCO’s climate-action plan, which includes a commitment to invest 20% of its assets under management to climate solutions by 2030.
Matthew Mendes, IMCO’s head of infrastructure, told IPE Real Assets: “We think [the energy transition] is a place where we can add a lot of value. And this investment really matches well with a couple of themes that we see – such as the electrification of the general economy – and certainly transportation is a really big piece of that.”
He added: “The recycling component is really important for a number of different reasons. Some of that is environmental sustainability, but part of it is from an energy security perspective, and you’re starting to see legislation being reflective of that.”
Northvolt’s first gigafactory, located in northern Sweden, has already begun producing batteries sustainably using fossil-free electricity.
Future additions to the facility are intended to support Northvolt’s goal of delivering 150GWh of annual production capacity by 2030.
Alexander Hartman, CFO of Northvolt, said: “We’re excited to partner with IMCO’s fundamental equities and global infrastructure teams to build the future of clean energy together.
“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.”
IMCO said its fundamental equities programme invests in companies and works with their management teams over the long term to unlock shareholder value.
The investment falls under its ‘fundamental-plus’ approach, where IMCO pursues negotiated transactions for meaningful equity stakes in public and pre-public companies.
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