EIT InnoEnergy and Demeter Investment Managers have launched of a fund dedicated to the development of a resilient and diverse battery raw material supply chain for Europe.
With a target size of €500m, the EBA Strategic Battery Materials Fund builds upon the success of the European Battery Alliance (EBA250) in its mission to create a resilient European battery industry.
The fund, unveiled during Davos, is launched amid rising European demand for batteries for electric vehicles and grid storage.
The demand is exposing “significant gaps” in the upstream (mining, processing) of the EU’s battery material supply chain.
In line with the EU’s Critical Raw Materials Act (CRMA) requirements to decrease the EU’s overreliance on foreign supply, the fund aims to boost domestic capacities for strategic battery materials such as lithium, nickel, cobalt, manganese and graphite.
Diego Pavia, CEO of EIT InnoEnergy, said: “To secure a thriving and resilient European battery industry, we must intensify our efforts in domestic battery raw materials production.
“While it’s encouraging to see a growing list of ambitious initiatives and financial stimuli from public and private players, their focus is typically on mature projects (post-Final Investment Decision).
“Yet these initiatives need a deal flow of de-risked projects, and therefore we also need a focus on early-stage upstream projects (scoping, PFS and DFS), committed to a sustainable, traceable and transparent battery materials supply chain – and that’s exactly what the EBA Materials Fund will deliver.”
Societe Generale will act as the exclusive financial advisor for the capital raising.
Commission Executive Vice-President Maros Sefcovic in charge of the European Green Deal and the European Battery Alliance said: “The battery industry is of strategic importance and a key battleground for global competitiveness.
“Therefore, it is vital to continuously up our game, with securing battery raw materials being the single biggest task ahead.
“Today’s innovative announcement shows that we mean business – on both, boosting our domestic European capacities and bolstering diversification via trade and cooperation with reliable partners. We need to be strategic, bold, agile.”
At least 70% of investments from the EBA Materials Fund will be dedicated to projects increasing EU domestic production from mining, processing, refining and recycling in EU and neighbouring countries.
The remaining 30% will focus on increasing raw material supply from EU Raw Material Partnership countries, such as Canada, Namibia, and Argentina.
The EBA Materials Fund will support projects in obtaining the highest environmental standards, following the robust sustainability criteria set under the EU Battery Regulation on traceability, sustainability and circularity, and other criteria which are currently being set under the CRMA.