On Friday 24 May 2024, Verkor announced that it has secured a EUR 1.2Bn non-recourse “green” financing to support the construction of its 16 GWh EV battery gigafactory in Dunkirk, France.
We are proud to support Verkor, a promising start-up in France’s “Battery Valley” emerging in the Hauts de France region, a flagship for green mobility in Europe.
Mohamed Kallala
Global Head of Natixis CIB
Simon Marielle, executive director in Natixis CIB’s Infrastructure & Energy Finance business, reveals the keys to the success of this landmark transaction.
What is your role in the transaction?
Natixis Corporate & Investment Banking acted as the Senior MLA, Green Loan Coordinator, Bpifrance Assurance Export (BPIAE) coordinator & agent, and Hedging Bank. Other entities of the BPCE Group, Caisse d'Epargne Hauts de France (CEHDF) and Caisse d'Epargne Rhône Alpes (CERA), also contributed to the transaction as Lenders.
Building on the success of an initial fundraising of €2 billion in 2023, the operation received strong support from commercial banks and from French and European public entities: 16 commercial banks as well as the European Investment Bank (EIB) financed the senior debt, amounting to €1.2 billion. The junior debt, amounting to €150 million, was financed by the Caisse des Dépôts et Consignations (CDC). The operation also received support from Bpifrance, which covered part of the senior financing tranche.
We relied on our in-depth sector knowledge, as well as the expertise of our Green & Sustainable Hub for green structuring.
Why is it "green" labelled?
The construction of the Dunkirk gigafactory aligns with the European ambitions for clean mobility, a Battery Electric Vehicle provides a material CO2 saving compared to an internal combustion engine vehicle over the vehicle’s life cycle.
Verkor is also positioned as one of the European pioneers in low-carbon footprint batteries for electric vehicles and stationary storage, with commitments throughout the battery life-cycle, from the choice of components to recycling. Verkor’s factory has access to nuclear-backed decarbonized electricity in France and benefits from waste heat recycling energy. Verkor's factory consumption will be able to derive half of its energy from waste heat from industrial processes. The Dunkirk gigafactory is anticipated to comply with the Eu Taxonomy substantial contribution criteria to climate change mitigation, for the enabling activity “Manufacture of batteries”.
To highlight these commitments and the environmental performance of its operations, Verkor has developed a Green Financing Framework, aligning with current best market practices, through which the loan is labeled as a green loan. It has received an external review from S&P Global Ratings, giving it the maximum score of “Dark Green”.
What are the main credit mitigants of the lenders?
Lenders perform their usual credit analysis centered around the strength of the project, the visibility of the revenues and sponsors supporting the project. Lenders here benefit from a long-term offtake agreement with Renault for the majority of the production. In addition, the project has gained the support of a strong shareholder group comprising Macquarie, Meridiam, Renault, FSP, and Bpifrance.
Lenders also benefit from the support of public entities given the importance of the project in terms of transition, reindustrialization and technological innovation. Verkor is, for example, part of the 2023 Next 40 program, which specifically supports French startups with the potential to become global technological leaders. In addition to the support of EIB, Bpifrance and CDC, Verkor also obtained significant subsidies from the French State to fast-track its development.
