Sunderland gigafactory receives £1bn boost

The UK Government has helped secure more than £1 billion of investment into the construction and operation of battery-maker AESC’s second gigafactory in Sunderland.

The landmark transaction sees the National Wealth Fund (NWF) and UK Export Finance (UKEF) provide financial guarantees to unlock £680 million in financing from commercial banks, including Standard Chartered, HSBC, SMBC Bank International and Societe Generale.

The guarantees are key to the delivery of a wider project financing package worth more than £1 billion.

Chancellor Rachel Reeves said: “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.”

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 CEO Shoichi Matsumoto said: “This investment marks a key milestone in AESC’s ongoing efforts to support the UK’s path toward decarbonisation 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.”

AESC's 1.8GWh plant, which started production in 2012, is Europe's first and the UK's only EV battery factory for more than a decade.

The UK Government has identified gigafactories as a core sector for NWF investment.

John Flint, National Wealth Fund CEO, said: “This investment further demonstrates the significant role NWF is playing to crowd private capital into the industries and regions where its most needed, boosting overnment’s growth and clean energy missions.”

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

Incorporated and headquartered in Japan, AESC is a developer and manufacturer of batteries for electric vehicles and energy storage systems and has a production footprint with major facilities in the UK, US, China and Japan.