Northvolt’s setbacks put Quebec on the defensive | The battery industry

The financial troubles experienced by the Swedish company Northvolt, which is currently building a mega-factory for electric car batteries in Montérégie, are increasing pressure on the Legault government, which has already invested hundreds of millions of dollars in the project.

The subject was on everyone’s lips on Tuesday in the National Assembly, the day after the start-up announced the loss of 1,600 jobs in Sweden.

The opposition is concerned that Quebec has invested some CAD$710 million so far in Northvolt’s parent company and its Montérégie plant project. It also fears that an additional CAD$297 million will be paid to it.

Arriving at question period on Tuesday afternoon, Prime Minister François Legault declared, however, that he was not not planned in the short term that his government invest more in Northvolt.

He also described as calculated risk the amounts invested so far, an expression he repeated several times during the question period that followed.

In a press scrum, the Minister of Economy, Innovation and Energy, Christine Fréchette, explained for her part that the 297 million dollars promised to the Swedish company will only be paid when the factory was built [québécoise] will have started And when private funding has also been raised.

Ms. Fréchette met with Northvolt’s CEO for North America, Paolo Cerruti, at the end of the day.

These statements follow those of the CEO of Investissement Québec (IQ), Bicha Ngo, who indicated Monday evening on the show Economy zone that the state-owned company did not intend to invest further in Northvolt until the Quebec plant takes shape.

We’ll have to see how the project evolves, she explained on Gérald Fillion’s set. Our goal is not to invest in the project in Sweden. It’s really to invest in the Quebec project as it progresses. At this stage, there is no intention to inject more money.

Ms. Ngo admitted, however, that the $270 million thatIQ has invested so far in Northvolt’s parent company in the form of convertible debenture will not be reimbursed as a priority in the event of restructuring.

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Minister Fréchette, for her part, wanted to reassure Quebecers on Tuesday. As for the 270 million in the parent company, we have a truly privileged status, in the sense that, if ever – you never know – a catastrophic event were to occur, we would be very well positioned to recover our share of assets.she said.

Millions of dollars invested

Quebec’s commitment to Northvolt totals $1.37 billion, or $567 million in share capital, $436 million in forgivable loans and $367 million in repayable loans, according to the most recent budget appropriations from Ms. Fréchette’s ministry, which took over from Pierre Fitzgibbon at the beginning of the month.

The Caisse de dépôt et placement also invested 200 million in the company’s parent company in the form of a convertible loan last fall.

Since then, however, Northvolt has been accumulating bad news. Faced with liquidity problems, the company was forced to present a strategic review plan two weeks ago. The layoffs resulting from this plan were estimated at 1,600 jobs on Monday.

Sweden later announced that it did not plan to become a shareholder in Northvolt. However, a crisis unit has been set up, the Days Industrya local business newspaper.

The company’s creditors, meanwhile, have asked a bank specializing in financial restructuring, PJT Partners, to advise them on possible options. And Northvolt has, for the same reasons, retained the services of the firm Teneo, Bloomberg learned on Tuesday.

The opposition is worried

Officially, jobs in Quebec are not affected by Northvolt’s financial woes for the moment. But the Legault government now expects the company’s Quebec plant to come online 18 months behind schedule.

For this reason, the Quebec Liberal Party (PLQ), which forms the official opposition in the National Assembly, is asking that Northvolt be stripped of the 354 megawatt block of electricity allocated to it by former minister Fitzgibbon. This block of power, it says, should be redistributed to SME Quebecois.

Québec solidaire (QS), for its part, presented a motion without notice on Tuesday, for Parliament to ask the government not to commit any additional public funds to the Northvolt company or any of its projectsThe Coalition avenir Québec (CAQ), however, did not agree to its being tabled.

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The President of the National Assembly, Nathalie Roy, also decided on Tuesday that Northvolt’s financial problems did not justify holding an emergency debate, as requested by the Parti Québécois (PQ), despite the sums committed to date.

Ms. Roy announced her decision in the afternoon, just before question period in the Red Room. According to her, there is no urgency to debate Northvolt’s difficulties, in particular because the consequences on the Quebec economy […] are still uncertain and hypothetical at the moment.

The job cuts in Sweden do not directly affect the company’s operations here.

There are still many future opportunities to debate this topic.she added, stressing that the parliamentary session was only in its third week of work.

Emergency debates are rare in the National Assembly. The last time they occurred was in 2020, when members debated the consequences for Quebec of the blockade of railway lines by Indigenous communities opposed to the construction of a gas pipeline in northern British Columbia.