LG Chem Group’s ambitions to build a lithium-ion gigafactory in Europe has been boosted with a €480 million ($518 million) loan agreement from the European Investment Bank (EIB).
LG Chem Wroclaw Energy, a subsidiary of the South Korean firm, finalised the loan on 26 March as it bids to extend production at its factory on its industrial site in south-west Poland.
The facility will manufacture advanced lithium-ion cells and batteries for battery-powered electric vehicles (BEVs) at an annual production capacity of more than 35GWh when completed.
The EIB financing will cover around a third of the total project costs, estimated at €1.5 billion ($1.6 billion). The remainder will come from the LG Chem’s own resources and from other financing sources, including a $250 million ($270 million) loan from The European Bank for Reconstruction and Development.
The project supplements smaller production facilities on the same site and will include a fully smart factory with cutting-edge technologies to mass-produce high energy density lithium-ion electrodes, cells, modules and battery packs.
Teresa Czerwinska, vice-president of the EIB, who oversees operations in Poland, said: “This first EIB operation with LG Chem Wroclaw Energy is significant for many reasons.
“It helps Europe to build a critical mass in electric vehicle battery production at a pivotal time of electric vehicle commercialisation in Europe; it promotes a shift to electromobility and to a greener automotive industry; and it helps create new qualified jobs in an industrial region in transition to a new economic model.”
The EIB said the investment had attracted more than a dozen “specialised component suppliers and service companies” to the region with a view to supplying LG Chem and other industrial players.
LG Chem is also expected to enhance existing cooperation programmes with the Technical University of Wroclaw and expand its technology centre in Wroclaw.
Last year, EIB has confirmed its approval in principle of a €350 million ($378 million) loan for Swedish battery maker Northvolt to build a 16GWh capacity lithium-ion battery cell plant.
In 2018, Greek lead-acid battery maker Sunlight received a €12.5 million ($13.5 million) financial shot in the arm from the EIB to expand manufacturing and new product development.