In a significant development, EIT InnoEnergy, in collaboration with Demeter Investment Managers, has unveiled the EBA Strategic Battery Materials Fund. This ambitious investment fund is dedicated to raising a substantial €500 million to bolster the creation of a resilient and diversified battery raw material supply chain across the European continent.
Today's announcement marks a pivotal moment in advancing Europe's capacity to supply strategic raw materials. These materials encompass the likes of lithium, nickel, cobalt, manganese, and graphite, all of which play a critical role in enabling cutting-edge technologies like battery storage and electric vehicles (EVs) to thrive in the clean energy landscape.
This innovative investment vehicle has been meticulously crafted to align with the EU's Critical Raw Materials Act, a directive to reduce Europe's dependence on external sources for essential minerals and resources that fuel emerging clean technologies. The ultimate goal is to safeguard against potential disruptions in the supply chain as the European Union accelerates its journey towards achieving net-zero emissions by 2050.
The EBA Strategic Battery Materials Fund has set a noteworthy target: a minimum of 70 per cent of its investments will be directed towards projects geared towards bolstering the domestic production of critical raw materials within the European Union. This multifaceted approach spans mining, processing, refining, and recycling operations within the EU and neighbouring nations, embodying a comprehensive strategy for material self-sufficiency.
The remaining 30 per cent of the fund's resources are strategically allocated to bolster raw material supply chains from countries participating in the EU Raw Material Partnership, including nations like Canada, Namibia, and Argentina.
Moreover, the fund's mission extends beyond merely financial support. It aspires to guide and empower projects in achieving the highest environmental standards concerning traceability, sustainability, and circularity—a testament to its commitment to a greener future.
Administration of the fund will be entrusted to the expertise of private equity firm Demeter, while Societe Generale will serve as the exclusive financial advisor for the capital raising process.
EIT InnoEnergy, known for its leadership in clean technology innovation, will leverage its early-stage investment acumen to identify and nurture groundbreaking projects. The aim is to foster a thriving and robust European battery industry by championing domestic battery raw materials production.
"To secure a thriving and resilient European battery industry, we must intensify our efforts in domestic battery raw materials production," said Diego Pavia, CEO of Netherlands-based EIT InnoEnergy.
"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. Yet these initiatives need a deal flow of de-risked projects, and therefore, we also need a focus on early-stage upstream projects committed to a sustainable, traceable and transparent battery materials supply chain - and that's exactly what the EBA Materials Fund will deliver."
As global pressure mounts for Western economies to fortify their clean technology supply chains, reducing reliance on raw materials from China has become imperative. Furthermore, with the recent enactment of the Inflation Reduction Act in the United States, the competition for green investment in areas such as batteries, renewables, and EVs has intensified.
Against this backdrop, the UK government has introduced its strategy, unveiling plans for a Critical Imports Council comprising key business figures and experts. Their mission is to support the Critical Imports and Supply Chains Strategy, further underlining the growing importance of securing critical resources and materials for the green revolution.
Maroš Šefčovič, the EU Commission's executive vice president overseeing the European Green Deal and the European Battery Alliance, has warmly welcomed the launch of the EBA Strategic Battery Materials Fund, highlighting its significance in the pursuit of a sustainable and resilient European battery industry.
"The battery industry is of strategic importance and a key battleground for global competitiveness," he said. "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."