The Dutch investment group EIT InnoEnergy, which specializes in greentech companies, and the French private equity and venture capital company Demeter Investment Managers have launched an investment fund to establish and expand a resilient supply chain for battery raw materials in Europe. The “EBA Strategic Battery Materials Fund” is said to contain a whopping 500 million euros. The overall goal of the fund is to build a competitive European battery industry.
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More independence in the area of battery raw materials
The demand for batteries is currently growing massively in Europe. However, there are significant supply gaps in the area of battery raw materials. European countries are heavily dependent on foreign imports. To counteract this, the EU Commission published its legislative proposal on critical battery raw materials (EU Critical Raw Materials Act, CRMA) in March 2023. In line with CRMA’s ambitions, the new fund aims to increase Europe’s production capacity in strategic battery raw materials such as lithium, nickel, cobalt, manganese and graphite.
“We can only ensure a thriving and resilient European battery industry if we intensify our efforts in domestic raw material production. The growing number of ambitious initiatives and financial incentives from the public sector and private players is encouraging. However, their focus is on advanced projects with comparatively low risk. In order to put our raw material supply on a broad basis, we also need a continuous inflow of early-stage industrial projects – and that is exactly what the EBA Materials Fund will do,” says Christian Müller, Member of the Board of EIT InnoEnergy and CEO for the DACH region .
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EIT InnoEnergy and Demeter are looking for suitable projects
Demeter, which also has experience as an investor in the greentech and infrastructure sectors, will act as manager for the fund. EIT InnoEnergy, in turn, brings in its industry knowledge to find suitable projects. With Société Générale, one of Europe’s leading financial service providers will also support the capital raising in an advisory role.
The Executive Vice President of the EU Commission, Maroš Šefčovič, responsible for the European Green Deal and the European Battery Alliance, explains: “The battery industry is of strategic importance and a key indicator of Europe’s competitiveness. We must therefore continually improve the starting conditions for our industry, and securing battery raw materials is the decisive lever for this. Today’s announcement shows that we are serious about both expanding our domestic European capabilities and diversifying through trade and cooperation with reliable partners. We need to be strategic, bold and agile.”
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Strict criteria for financial support
At least 70 percent of the investments from the fund should flow into projects that serve the production of raw materials in the EU and its neighboring countries, from extraction to processing and refining to recycling. The remaining 30 percent will be used to increase the supply of raw materials from countries in the EU raw materials partnership, such as Canada, Namibia and Argentina.
The fund is intended to only support projects that meet the highest environmental standards and meet the requirements of the EU Battery Regulation in terms of traceability, sustainability and circular economy, as well as other criteria.