Automotive Energy Supply Corporation ( AESC ), a maker of lithium ion batteries for electric vehicles, has secured a £1.04 billion ( US$1.41 billion ) financing package for its new 15.8-gigawatt-hour electric vehicle ( EV ) battery gigafactory in Sunderland, England.

The National Wealth Fund and UK Export Finance will provide financial guarantees for €680 million ( US$774.35 million ) in financing from Standard Chartered, HSBC, SMBC Group, Société Générale, and BBVA. Linklaters advised the underwriters/lenders and export credit agencies.

The remaining £320 million is new equity provided by AESC, plus £150 million in grant funding from the government’s Automotive Transformation Fund.

According to Linklaters, the project will be only the second gigafactory project in the United Kingdom ( after AESC’s existing plant ) and will provide the blueprint for future deals and investment in this key sector for the transition to net zero.

Established in 2007, AESC is a joint venture between Nissan and Tokin Corporation. In 2018, Shanghai-based Envision Group acquired a majority stake in the battery division, with its manufacturing plants in the US state of Tennessee and Sunderland.  

The new plant will provide up to 15.8 gigawatt-hours of battery supply when operating at full capacity, representing an almost six-fold increase on the current UK gigafactory capacity. AESC's 1.8GWh plant, which started production in 2012, is Europe's first and the UK's only EV battery factory for over a decade.

"Once operational, the gigafactory will unlock a huge increase in the UK’s EV battery production, supporting the electrification of vehicles and the wider green transition," says HSBC UK chief executive officer Ian Stuart. "The inward investment involved in the project will also deliver highly-skilled jobs and economic growth to North East England."

Photo: AESC’s new battery gigafactory in Sunderland. ( AESC )