Northvolt insolvency: Schleswig-Holstein sticks to battery factory plans

Despite the insolvency of the Swedish battery manufacturer Northvolt, Schleswig-Holstein's Minister-President Daniel Günther still believes the construction of a battery factory near Heide is feasible. "I will continue to advocate for batteries to be produced in the Dithmarschen district by 2029 at the latest," the CDU politician told the German Press Agency. " Europe needs sovereign battery cell production. And it has turned out that here in Schleswig-Holstein is the best location for this."

Günther emphasized his conviction in the concept of a battery factory in the region: "That's why I'm not currently considering other scenarios. We have an excellent industrial site there. It's a location predestined for establishing battery production."

The Christian Democrat is optimistic that the insolvency administrator will find a solution. "I'm encouraged by the fact that there are apparently several interested parties for Northvolt," said Günther. "I'm counting on the insolvency administrator to be successful and that clarity will be achieved in the coming months."

Northvolt had received approximately €600 million from the state development bank KfW for the planned factory construction near Heide via a convertible bond. The federal and state governments each guaranteed half of the convertible bond. In addition, €20 million was paid for interest and procedural costs. At the beginning of 2024, the EU Commission also approved direct funding of approximately €700 million (€137 million from the state and €564 million from the federal government). However, this money has not yet been disbursed.

"Our focus is on making this project a success," said Günther. "The federal and state governments have invested a three-digit million sum in this. The site is already very well connected and developed. The goal is to establish a battery production facility in the region with thousands of employees."

At the same time, Günther defended himself against persistent criticism from the opposition that the government had failed to adequately fulfill its duty to provide information. "Name me any other example where a government has submitted such a large volume of documents, publicly documented every process and procedure, and also fought for maximum transparency. Everyone can read that the state government has examined the advantages and disadvantages, opportunities, and risks of the project," he said.

"According to the report commissioned by the federal government , the probability of default was less than one percent and the probability of repayment was 86 percent. We made the decision on this solid basis," said the head of government. Therefore, the path taken by the CDU/Green coalition in the Northvolt case was correct, even in retrospect.

It is unclear how much the Northvolt insolvency will cost taxpayers in Schleswig-Holstein. However, according to previous information from insolvency administrator Mikael Kubu, several interested parties from outside Sweden are now interested in taking over the battery manufacturer.

In Schleswig-Holstein, the FDP is suing the state constitutional court for a possible violation by the state government of its duty to inform the state parliament. This concerns the information provided by the state government to the state parliament's Finance Committee before the crucial meeting in January 2024. At that time, the members of parliament unanimously cleared the way for the convertible bond.