In a strategic collaboration aimed at fortifying Europe’s battery industry, EIT InnoEnergy and Demeter Investment Managers have jointly announced the launch of the ‘EBA Strategic Battery Materials Fund’.
The EBA Materials Fund, backed by a €500m investment, is dedicated to bolstering the development of a robust and diverse battery raw material supply chain within Europe.
Diego Pavia, CEO of EIT InnoEnergy, emphasised the significance of the move for Europe’s battery ecosystem: “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.”
Addressing battery industry gaps amidst soaring demand
The EBA Materials Fund emerges at a crucial juncture as European demand for batteries reaches unprecedented levels, revealing notable deficiencies in the upstream segments of the EU’s battery material supply chain, including mining and processing.
Aligned with the European Union’s Critical Raw Materials Act (CRMA), which seeks to reduce dependence on foreign supply, the fund specifically targets enhancing domestic capacities for critical battery materials such as lithium, nickel, cobalt, manganese, and graphite.
Dynamics of the strategic partnership
Demeter Investment Managers, a prominent European private equity and venture capital firm, will serve as the fund manager, leveraging its extensive experience in greentech and infrastructure.
EIT InnoEnergy, a driving force propelling sustainable energy innovation and the European Battery Alliance (EBA250) since 2017, will contribute its sector-specific heritage and broad early-stage investment expertise to identify and support high-risk projects.
Societe Generale has been appointed as the exclusive financial advisor for the capital raising, underlining the strategic and comprehensive approach to the fund’s financial operations.
Aims of the EBA Materials Fund
A significant aspect of the EBA Materials Fund is its commitment to allocating at least 70% of investments to projects enhancing EU domestic production.
This encompasses activities ranging from mining and processing to refining and recycling within the EU and neighbouring countries.
The remaining 30% will be directed towards increasing raw material supply from EU Raw Material Partnership countries, including but not limited to Canada, Namibia, and Argentina.
Focus on battery materials sustainability
Emphasising environmental responsibility, the EBA Materials Fund will support projects adhering to the highest environmental standards. This includes compliance with sustainability criteria mandated by the EU Battery Regulation, covering traceability, sustainability, and circularity.
Moreover, the fund aims to achieve one of the highest ESG classifications, categorising it as an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
Commission Executive Vice-President Maroš Šefčovič added: “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.”
The EBA Strategic Battery Materials Fund represents a pivotal initiative in securing Europe’s position in the global battery industry. By addressing supply chain vulnerabilities and emphasising sustainability, the fund is poised to play a crucial role in shaping the future of the European battery landscape.
