Sunderland gigafactory secures £200m loan from UK Infrastructure Bank
Summary
The UKs nascent battery manufacturing industry has received a major boost this week, with China-owned firm AESC having been awarded a \xa3200m bridging loan from the UK Infrastructure Bank (UKIB) to support the development of its 15.8GWh gigafactory in Sunderland.Construction of the lithium-ion battery factory started in 2022, and is expected to create and support more than 1,000 jobs once operational in 2025, while helping to strengthen Britains electric vehicle (EV) supply chain.The factory is set to produce lithium-ion batteries for next generation EVs manufactured in the UK, and is being developed by Automotive Energy Supply Corporation (AESC), which is majority owned by Chinese energy giant Envision.Headquartered in Japan, AESC also operates EV battery facilities in France, Spain, the US, and China.Talks are also reportedly underway over a potential collaboration deal with Japanese carmaker Nissan, which retains a minority 20 per cent stake in AESC, and also operates its own major car factory in Sunderland.The site will be AESCs second battery factory in Sunderland, with the existing 1.8GWh factory built in 2012 currently still the UKs only operational gigafactory. The new facility is expected to deliver a six-fold increase in the UKs EV battery production capacity, according to the firm.The UKs relative lack of capacity for producing batteries to meet rapidly growing demand for EVs compared to many of its international competitors has prompted widespread concern. Last year, MPs urged the government to provide further investment and support to avoid the domestic EV sector being hampered by a reliance on imported batteries.UKIB CEO John Flint said the \xa3200m loan would support the governments recently published Battery Strategy, and aligned with the Banks mission to support the nations net zero ambitions, invest in critical supply chains, and boost regional economic growth in the UK. "This loan signals the Banks appetite to play a meaningful role in the financing of the domestic battery supply chain and that we are ready and willing to deploy capital where it is needed for this crucial net zero infrastructure. Check out BusinessGreen Intelligence - the premier information for professionals focused on the UKs green economy.