Caisse de dépôt et placement du Québec (CDPQ), will invest $200 million in the battery specialist Northvolt AB, which recently announced a massive electric vehicle battery factory in Quebec.
On Thursday, Quebec’s pension fund manager announced the investment going towards the Swedish firm. In September, the company announced the $7-billion Northvolt Six facility which will be built by the end of this year in Saint-Basile-le-Grand and McMasterville, close to Montreal.
The CDPQ is a global investment group managing funds for public pension and insurance plans.
“We are delighted to partner with such a major, long-term institutional investor that is committed to Québec’s economic and energy development,” he added.
“Northvolt continues to integrate into the economic and social fabric of Québec, and the CDPQ’s investment in Northvolt is further evidence of this.”
In the upcoming five to nine years, Northvolt is set to receive government production incentives totalling $4.6 billion, with Quebec contributing a third of this amount, adding up to an additional $1.5 billion from the province.
To fund the project, the federal government is investing $1.34 billion, and the Quebecois government $2.9 million. The Northvolt Six facility is positioned to become a major player in electric vehicle battery production and the company aims to commence battery production by 2026.
The site of Northvolt Six could fit approximately the size of 1000 hockey rinks inside of it. The facility will also have areas for cathode active material production as well as battery recycling.
Co-founder of Northvolt and CEO of Northvolt North America Paolo Cerruti said the CDPQ has been involved in the process for several months.
Upon completion, the facility will boast an annual production capacity of up to 60 gigawatt-hours (GWh). It will encompass facilities for the manufacturing of cathode active material, cells and the use of recycled materials.
“The battery value chain is a high-interest sector for CDPQ, and with a favourable impact on the energy transition, we believe it will experience strong growth over the next decade, which we expect will benefit our depositors,” Head of Québec at CDPQ Kim Thomassin said.
“This sector is promising for Québec’s economic development and we want to contribute to that.”
Quebec investing billions in carbon-free projects in 2023
Quebec is making significant strides in its commitment to carbon-free initiatives in 2023, with a series of substantial investments in various industries.
Earlier this year, Ford Motor Co. (NYSE: F) and its South Korean collaborators announced a $1.2 billion manufacturing facility for electric vehicle battery materials in Bécancour, Quebec. The project will receive $644 million from the Quebecois and federal governments.
Other investments include a $600 million factory, owned by General Motors Co. (NYSE: GM)and the South Korean firm POSCO Holdings (KRX: 005490), where $300 million will come from the federal government and $300 million from the Quebecois government.
Rio Tinto Group (ASX: RIO) (NYSE: RIO) (LON: RIO) plans to invest $737 million in Sorel-Tracy, Quebec to boost critical mineral production, with $222 million in public funding from Canada. Meanwhile, The Volvo Group’s (STO: VOLV-V) subsidiary Prevost in Sainte-Claire is receiving $22.6 million for vehicle electrification, comprising a $15.5 million loan and a $7.5 million grant.