EU-backed investors plan 500-mln-euro battery raw materials fund
18/01/2024 05:00
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InnoEnergy, Demeter launch fund to kick-start projects
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Aims to develop local domestic supply chain
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Part of EU efforts to boost bloc's sovereignty
By Simon Jessop
LONDON, Jan 18 (Reuters) - Two of Europe's leading
energy transition investors plan to raise 500 million euros
($544.55 million) for a battery raw materials fund, aiming to
plug "significant gaps" in the region's supply chain, executives
told Reuters.
InnoEnergy, backed by the European Union, and Demeter
Investment Managers said the EBA Strategic Battery Materials
Fund would focus its efforts on critical minerals including
lithium, nickel, cobalt, manganese and graphite.
Amid surging demand for electric batteries for transport and
industry, the bloc is seeking to reduce its reliance on foreign
supplies as part of the EU's Critical Raw Materials Act.
As the manager of the EU-backed European Battery Alliance,
InnoEnergy aims to create a complete domestic battery value
chain to boost the bloc's sovereignty.
"Any value chain is as strong as the weakest of its links
and today the weakest of the links is the upstream," including
mining to recycling, and where 90% of current supply comes from
China, said Diego Pavia, chief executive of InnoEnergy, who was
attending the World Economic Forum in Davos, Switzerland.
Commission Executive Vice-President Maroš Šefčovič said in a
statement that the battery industry was of "strategic importance
and a key battleground for global competitiveness", adding
securing raw materials was "the single biggest task ahead".
Over time, the aim is to secure 40-50% of the necessary
supply through projects that will ultimately cost around 7 or 8
billion euros but which may prove slow to get off the ground
without the willingness of the fund to take development risks.
"We are solving the risky phases," Pavia said.
Established in 2010 and backed by 35 corporate and financial
investors, InnoEnergy has so far invested its balance sheet in
200 companies with a combined 110 billion euros in revenue,
including battery makers Northvolt and Verkor.
Once the money is raised, Demeter, which manages 1.3 billion
euros and has invested in 230 companies and projects over 17
years, will act as investment manager while InnoEnergy will help
identify and support potential projects.
At least 70% of the investments made by the fund will be in
projects aimed at boosting domestic production from mining,
processing, refining and recycling, with the rest in countries
such as Canada, Namibia and Argentina.
One key focus of the fund will be to find more
environmentally friendly ways of extracting and treating the raw
materials, such that it can be classed as an Article 8 fund
under the EU's Sustainable Finance Disclosure Regulation.
Antoine Troesch, managing partner at Demeter, said new
techniques being developed were "less intrusive" to the
environment. "This is where we want to be quite different."
($1 = 0.9182 euros)
(Additional reporting by Clara Denina
Editing by Bernadette Baum)
((simon.jessop@thomsonreuters.com; +44 (0) 207 542 5052;
Reuters Messaging: Reuters Messaging:
simon.jessop.thomsonreuters.com@reuters.net))