SK On has secured $3 billion from three investors from Germany and Korea to spend on building its lithium-ion battery manufacturing gigafactory Plant No.3 in Europe.
The plant is under construction in Iváncsa, Hungary at a cost of KRW3.31 trillion ($2.5 billion) and will produce 30GWh of batteries a year from 2024.
The three agencies that took part in the financing are all export credit agencies (ECAs) and they will finance SK On by providing credit guarantees and insurance as the company applies for loans in overseas commercial banks.
The investments, secured with the aid of Euler Hermes, come from a trade credit insurance institution of Germany, Korea Trade Insurance Corporation, and the Export-Import Bank of Korea.
Euler Hermes and Korea Trade Insurance Corporation will provide insurance worth $800 million and $700 million respectively, and the Export-Import Bank of Korea will guarantee a $200 million worth of loan.
At the same time, the Export-Import Bank of Korea will loan $300 million directly to SK.
With this, SK On is set to withdraw the resource sequentially from seven overseas commercial banks starting next month.
The long-term loan has a two-year grace period, with an amortization term of five years at level payment.
SK On has new plants under construction in the US, Europe and China that will eventually grow its production capacity from 1.7GWh production capacity in 2017 to 77GWh by the end of this year, to 220GWh by 2025, and to 500GWh by 2030.