Through the National Wealth Fund (NWF) and UK Export Finance (UKEF), the UK government is helping to secure more than £1 billion of investment into the construction and operation of battery-maker AESC’s second gigafactory in Sunderland, strengthening the UK's battery-production capacity while boosting jobs, skills and growth in the North-East of England.

The landmark transaction sees the NWF and UKEF provide financial guarantees* which unlock £680 million in financing from a group of commercial banks which includes Standard Chartered, HSBC, SMBC Bank International Plc, Societe Generale and BBVA. The guarantees are key to the delivery of a wider project financing package worth more than £1 billion.

When complete, AESC Plant 2 will play a significant role in the decarbonisation of the UK automotive industry with initial capacity aimed to power up to 100,000 electric vehicles (EV) each year. The plant will employ more than 1,000 people.

The plant will ultimately be able to provide up to 15.8GWh battery supply when operating at full capability, representing an almost six-fold increase on current UK gigafactory capacity. AESC's 1.8GWh plant, which started production in 2012, is Europe's first and the UK's only EV battery factory for over a decade.

The UK government has identified gigafactories as a core sector for NWF investment. As a proven supplier of EV batteries in over 1 million vehicles and production capacity across three continents, AESC will support the UK in establishing a globally competitive domestic battery supply chain and in achieving net zero by 2050.

The NWF’s financial guarantee follows and replaces an initial £200 million short-term bridging loan to AESC announced in January 2024 (prior to the UK Infrastructure Bank transitioning into the National Wealth Fund).

Chancellor of the Exchequer, Rachel Reeves, said:

We are going further and faster to boost our industries’ resilience and encourage their growth as part of our Plan for Change, and this investment follows hot on the heels of yesterday’s landmark economic deal with the US which will save thousands of jobs in the industry.

This investment in Sunderland will not only further innovation and accelerate our move to more sustainable transport, but it will also deliver much-needed high quality, well-paid jobs to the North East, putting more money in people’s pockets.

Business and Trade Secretary, Jonathan Reynolds, said:

We’re backing our world-class car industry, and this investment is yet another vote of confidence in the North East’s thriving auto manufacturing hub which will secure a thousand well-paid jobs and boost prosperity across the region.

Our modern Industrial Strategy will drive this growth even further, powering our high-potential sectors like advanced manufacturing so we can deliver jobs and investment in every corner of the UK and make our Plan for Change a reality.

AESC CEO Shoichi Matsumoto said:

This investment marks a key milestone in AESC’s ongoing efforts to support the UK’s path toward decarbonization and the expansion of its EV market. Through close collaboration with strategic partners, we strive to accelerate this transition while creating high-quality local jobs and building a resilient, sustainable supply chain. We are honored to contribute to the development of a low-carbon economy with our advanced battery technologies.

John Flint, National Wealth Fund CEO said:

AESC’s gigafactory will not only help to retool our car industry for net zero it will also support jobs, growth and prosperity in the Northeast. This investment further demonstrates the significant role NWF is playing to crowd private capital into the industries and regions where its most needed, boosting government’s growth and clean energy missions.

UKEF CEO, Tim Reid, said:

This hugely exciting project is a prime example of how export financing is a powerful tool for unlocking growth opportunities for British exporters and strengthening local economies.

We’re proud to join forces with partners to back this pioneering gigafactory that will help cement the UK’s prowess as an EV battery-making force for years to come.

Ian Stuart, UK CEO for HSBC who were joint ECA Coordinator & Structuring Bank (alongside SCB) as well as Underwriting Bank and Mandated Lead Arranger, said:

We’re extremely proud to have played a leading role in this complex and significant deal, including as underwriter, structuring bank and joint ECA co-ordinator. Once operational, the gigafactory will unlock a huge increase in the UK’s EV battery production, supporting the electrification of vehicles and the wider green transition. The inward investment involved in the project will also deliver highly-skilled jobs and economic growth to North East England.

Hideo Kawafune, CEO, Head of EMEA, SMBC Banking International plc said:

SMBC Group is delighted to participate in the successful financing of this landmark Gigafactory project. As a lending partner we’re proud to work alongside partners such as National Wealth Fund, UK Export Finance and Sinosure, as well as existing client AESC, in order to support projects which power the energy transition.

Saif Malik, CEO, UK and Head, Client Coverage, UK, Standard Chartered said:

We are proud to support this transformative UK project. The development of AESC’s new gigafactory will deliver significant economic benefits locally while supporting the development of zero-emission technology. This is more than an investment in infrastructure, it’s a commitment to innovation, UK economic growth and sustainability. Supporting the transition to net zero is deeply embedded in how we operate as a Bank, and this project reflects how we bring that to life by supporting clients on their own sustainability journeys.

Lenaig Trenaux, Societe Generale’s Global Head of Batteries, Mining and Industries, said:

We are proud to have worked with AESC to deliver the first gigafactory project financing in the UK, which has benefitted from strong support from the National Wealth Fund and UK Export Finance.

Societe Generale’s deep understanding of the EV value chain, coupled with our experience working with AESC, were instrumental in delivering the project financing.

This is another demonstration of SG’s commitment to the green mobility and another step towards the energy transition.

Beatriz Roa, Global Sectoral Head of Industrials at BBVA, states:

BBVA is proudly supporting AESC in this landmark project in the UK. This gigafactory will help foster the transition to electric vehicles while supporting the buildup of an entire ecosystem around battery manufacturing in Sunderland. These are key objectives in BBVA's efforts to support the transition to a more sustainable economy and to the auto and energy industries in particular.

* The National Wealth Fund and UK Export Finance have each provided an 80% financial guarantee covering £272 million of a £340 million loan.

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