The UK Infrastructure Bank (UKIB) has announced a £200m loan to support the development of AESC’s gigafactory in the North East of England.
The UKIB, which is state-owned, was formed in 2021 to help tackle climate change and support regional and local economic growth. It partners with the private sector and local government to help solve financial problems linked to these objectives.
The bank said the investment would help strengthen the UK’s electric vehicle (EV) supply chain and provide a boost to the regional economy.
The bridging loan will support the construction of AESC’s 15.8GWh gigafactory in Sunderland, which began in 2022. The project will create and support more than 1,000 jobs once operational, the UKIB said.
AESC is headquartered in Japan and manufactures high-performance batteries for EVs and energy storage systems.
The factory will produce lithium-ion batteries designed to be directly used by UK carmakers in next-generation EVs. Domestic battery manufacture is seen as crucial to the success of future UK car production and key for the transition to net zero, with around 200GWh needed by 2040 to meet demand from car manufacturers.
The site will be AESC’s second plant in Sunderland, with the existing 1.8GWh facility built in 2012 currently the UK’s only operational gigafactory.
UKIB CEO John Flint said:
“A domestic battery supply chain will play an important role in the UK’s transition to net zero and also the wider economy, as highlighted in the government’s recently published battery strategy.
“Gigafactories are an essential part of that supply chain. They also have the potential to secure and create thousands of jobs, but serious investment is needed to scale up production.
“This loan signals the bank’s 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.”
