EIT InnoEnergy and Demeter launch €500m European battery raw materials fund

18 January 2024, Davos: EIT InnoEnergy, the innovation engine for sustainable energy supported by the European Institute of Innovation & Technology (EIT), a body of the European Union (EU), and Demeter Investment Managers, a major European private equity and venture capital firm; today announced the launch of a fund dedicated to the development of a resilient and diverse battery raw material supply chain for Europe.

With a target size of €500 million, the ‘EBA Strategic Battery Materials Fund’ (EBA Materials Fund or the “Fund”) builds upon the success of the European Battery Alliance (EBA250) in its mission to create a resilient European battery industry. The fund is launched amidst soaring European demand for batteries which is 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.

Diego Pavia, CEO of EIT InnoEnergy said: “To secure a thriving and resilient European battery industry, we must intensify our efforts in domestic battery raw materials production. 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, and therefore we also need a focus on early-stage upstream projects (scoping, PFS and DFS), 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 fund manager, bringing its wealth of experience in greentech and infrastructure. EIT InnoEnergy will tap into its sector heritage, evidenced by leadership of EBA250 since its inception in 2017, along with broader early-stage investment expertise to identify and support risky projects.

Societe Generale will act as the exclusive financial advisor for the capital raising.

Commission Executive Vice-President Maroš Šefčovič in charge of the European Green Deal and the European Battery Alliance said: “The battery industry is of strategic importance and a key battleground for global competitiveness. Therefore, it is vital to continuously up our game, with securing battery raw materials being the single biggest task ahead. Today’s innovative announcement shows that we mean business – on both, boosting our domestic European capacities and bolstering diversification via trade and cooperation with reliable partners. We need to be strategic, bold, agile.”

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 EU and neighbouring 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 will support projects in obtaining the highest environmental standards, following the robust sustainability criteria set under the EU Battery Regulation on traceability, sustainability and circularity, and other criteria which are currently being set under the CRMA. The fund will have one of the highest ESG classifications as an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation (SFDR).

Antoine Troesch, Managing Partner at Demeter, added: “Demeter is delighted to launch this initiative together with EIT InnoEnergy, in a critical segment for European countries to succeed in energy and ecological transition. Demeter will bring its recognized expertise in green investments and its methodologies for ensuring those investments meet the highest ESG standards.”

Download the full press release here.

Pictured above: Diego Pavia, CEO of EIT InnoEnergy announced the launch of the Fund at a panel hosted by CapGemini at Davos alongside European Commission EVP Maroš Šefčovič, CEO of Verkor Benoit Lemaignan, and Cyril Garcia, Global Sustainability and Corporate Responsibility Head at CapGemini.