Northvolt has already spent, out of its “own pocket”, 135 million dollars on its mega-battery factory project in Montérégie, the company maintains Dutyat a time when the public funds promised for the project are being debated.
The $135 million “was used for project engineering, purchasing materials and preparing the site,” said Northvolt’s director of communications and public affairs in North America, Laurent Therrien, by email.
To launch the project, the company also received public funds from Quebec. Through its financial arm Investissement Québec, the Legault government notably invested a “convertible debenture” — a loan convertible into shares — of $270 million in Northvolt’s parent company in Sweden.
This sum is to be used to “finance preliminary activities” for its mega-factory in Quebec, according to a decree adopted by the Council of Ministers in October 2023. It therefore made it possible to replenish Northvolt’s existing liquidity.
But then, how can we distinguish between current investments on the ground that come from the company and those that come from Quebec? Difficult to say, according to experts.
“It’s all in the sequence of events, and there’s a certain vagueness,” says Michel Magnan, a professor at Concordia University’s John Molson School of Business.
But there are certainly funds at the start that were put in by the company itself for all the development of the project, the business plan, the engineers’ quotes… even before obtaining the funds from the governments.
François Dauphin, CEO of the Institute for Governance of Private and Public Organizations, agrees. “It’s like you and me, if you have different sources of income in your personal bank account, it becomes difficult to determine where each dollar spent comes from,” explains the expert.
“But there are certainly funds at the start that were put in by the company itself for all the development of the project, the business plan, the engineers’ quotes… even before obtaining the funds from the governments,” he adds.
Who has put in how much so far?
In total, the investments needed to carry out the Northvolt project in Quebec amount to $7 billion. The company itself plans to invest $4.3 billion, while the Legault and Trudeau governments have promised to contribute $1.37 billion and $1.34 billion, respectively.
How much has been spent so far?
Beyond the 135 million that the company says it has already injected, Laurent Therrien emphasizes that “Northvolt’s investments [au Québec] continue”.
We also know that the Quebec government has already “committed” a total of 510 million to the company in the following manner:
- 240 million in repayable loan for the purchase of land, located in Saint-Basile-le-Grand and McMasterville;
- 270 million in convertible debentures to finance the “preliminary activities” of the parent company in Quebec.
The federal government has not yet begun to disburse the sums it promised to the company.
Unlike Quebec, which has chosen to have a stake in Northvolt, Ottawa proceeds in a way by reimbursements upon presentation of invoices, via the Strategic Innovation Fund. The sums are therefore released once they have been spent by Northvolt.
Alongside the governments, the Caisse de dépôt et placement du Québec has also invested money. The institution injected $200 million in financing, in the form of convertible debt, into the parent company.
Note that Ottawa and Quebec also plan to subsidize Northvolt’s battery production by up to $4.6 billion once its mega-factory in Montérégie is operational. However, this should take longer than expected, since the project is behind schedule. The factory is scheduled to open in 2027, but the deadline would be delayed by 12 to 18 months, according to the Legault government.