South Korea battery equipment are planning to for ma consortium to better handle orders from Swedish battery firm Northvolt, TheElec has learned.
Northvolt was reviewing using Japanese trading company DJK Group to place orders for the equipment it needs to South Korean companies, people familiar with the matter said.
The companies will form a consortium and DJK will bear the export financing cost.
Electrode company CIS and many other South Korean companies are planning to take part in the consortium. The Japanese firm will get a commission.
South Korean equipment makers are forming the consortium as the volume of orders from Northvolt has increased. They need cash to export all the ordered goods. If multiple orders are placed at the same time, the companies maybe cash strapped. DJK can provide the guarantees in such situations.
However, some in the local equipment industry feel the South Korean government should step in and take DJK’s place as the Japanese company will get more commissions from the increased orders, which neither benefits the consortium or Northvolt, a person familiar with the matter said.
The Export-Import Bank of Korea previously provide US$100 million in project financing for Northvolt. But it was for Swedish battery maker’s funding round for the US$1.6 billion, in which other European banks participated, it needed to expand its factory.
Meanwhile, Northvolt, though its joint venture with Volkswagen, is planning to expand its factory’s production rate by 20GWh per year in the next two years. The company plans to secure a production capacity of 150GWh per year by 2030.