EIT InnoEnergy, the European innovation engine in sustainable energy, and Demeter Investment Managers, a major private equity and venture capital firm, are launching a fund dedicated to a resilient and diverse battery raw material supply chain for Europe.
With a target size of €500 million, the ‘EBA Strategic Battery Materials Fund’ builds upon the success of the European Battery Alliance in its mission to create a resilient European battery industry. The fund is launched amidst soaring European demand for batteries, exposing significant gaps in the upstream (mining, processing) of the EU’s battery material supply chain. In line with the EU’s Critical Raw Materials Act (CRMA) requirements to decrease the EU’s overreliance on foreign supply, the fund aims to boost domestic capacities for strategic battery materials such as lithium, nickel, cobalt, manganese, and graphite.
According to Diego Pavia, CEO of EIT InnoEnergy, Europe must intensify its domestic battery raw materials production efforts to secure a thriving and resilient European battery industry. “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. 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.”
Demeter will act as a fund manager and joint venture partner, bringing its wealth of experience in Greentech and infrastructure. EIT InnoEnergy will tap into its sector heritage, and Societe Generale will act as the exclusive financial advisor to EIT InnoEnergy and Demeter, supporting the raise of capital.
At least 70% of investments from the EBA Materials Fund will be dedicated to projects increasing EU domestic production from mining, processing, refining, and recycling in the EU and neighboring countries. The remaining 30% will focus on increasing raw material supply from EU Raw Material Partnership countries, such as Canada, Namibia, and Argentina.
The EBA Materials Fund promises to support projects in obtaining the highest environmental standards, following the robust sustainability criteria set under the EU Battery Regulation on traceability, sustainability, and circularity, as well as other criteria currently being set under the CRMA.
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