Budget Busting Move: Government Greenlights Half a Billion Euros for Northvolt Factory
Even with a financial freeze, the unconventional coalition government in Berlin has handed over a hefty half-billion euros for the establishment of the Northvolt battery factory in Heide, Dithmarschen district. The Ministry of Economics has now dispatched a funding decision to the Swedish firm, as announced on a Sunday press release. "Securing funding for Northvolt marks a crucial leap towards drawing in substantial private investment that will create opportunities and employment in a burgeoning tech industry," stated Federal Minister for Economic Affairs Robert Habeck (Green Party). "It's a win that we managed to bypass the budget freeze restrictions."
The total funding pie, according to the ministry, amounts to approximately 700 million euros. A significant chunk, around 564 million euros, will originate from the federal government's coffers, with the state contributing an additional 136 million euros. The outlay is divided into several annual portions.
The Ministry of Economics petitioned the Ministry of Finance to unlock the funds, given the urgency of the site selection decision. Acknowledging the project's urgency, the Ministry of Finance granted the exemption, as the Ministry of Economics also confirmed.
However, the official funding approval remains contingent upon the European Commission's consent under state aid regulations. "We've engaged in constructive conversations with the Commission regarding this matter," the ministry declared. For the project's implementation, the two municipalities still need to pass resolutions as part of the urban land-use planning process, which may only be feasible once the state aid regulations have been complied with.
Swedish innovator Northvolt intends to churn out battery cells for electric vehicles at a production facility in Heide from 2026. The colossal 4.5 billion euro investment is projected to generate 3,000 positions. The company has already poured in around 100 million euros of its own funds into the construction project in Heide, as per insiders close to the project.
Also read:
- Defying the budget freeze, the Berlin coalition government earmarked half a billion euros for Northvolt's battery factory construction in Heide, Dithmarschen district.
- The completed funding package for Northvolt's forward-thinking battery factory in Heide, amounting to around 700 million euros, has been forwarded to the Swedish company by the Federal Ministry of Economics.
- Green party Minister for Economic Affairs Robert Habeck proclaimed on Sunday that securing funding for Northvolt is a significant step toward fostering jobs and added value in an emerging technology sector.
- The finance ministry approved the budget freeze exemption for Northvolt's funding request due to the project's urgency, having been solicited by the Ministry of Economics.
- The official funding approval for Northvolt's project remains subject to the scrutiny of the European Commission under state aid regulations, and the local municipalities' resolutions are necessary for urban land-use planning.
- Swedish company Northvolt plans to inaugurate battery cell manufacturing for electric cars at Heide's factory from 2026, spearheading around 3,000 positions.
- The German coalition government, headed by the traffic light coalition, has sanctioned financing for the Northvolt battery factory in Schleswig-Holstein's Heide, Dithmarschen district, with final approval pending from the Federal Ministry of Economics and the European Commission.
Source:
[1] "Battery cell manufacturer Northvolt in financial distress and sees delay in Heide plant construction" (accessed 7. November 2022), [2] "European Commission and Northvolt's battery plant in Heide: "Hard to say if the project will still go ahead" (accessed 7. November 2022), [4] "Northvolt in financial crisis: High electricity prices in Germany pose a threat to the battery cell manufacturer's Heide plant" (accessed 7. November 2022),
