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Hyundai Motor Group (HMG) and LG Energy Solution (LGES) have secured US$710 million (RM3.19 billion) in loans and guarantees for its joint battery plant project in Indonesia, Korean news agency Yonhap reported.
Hyundai and LG will receive funding from five different international financing firms across a 10-year loan period, and the companies will gradually take out the loan as project goes on, the two companies were quoted as saying.
Debt guarantees will be provided by Hyundai Motor Company, Kia Corporation, Hyundai Mobis and LGES, porportionate to the value of their respective stakes in the project, while credit guarantees will be provided by trade insurer Korea Trad Insurance Corporation.
The Korean automotive group and battery manufacturer formed a US$1.1 billion (RM4.9 billion) joint venture for the construction of an EV battery plant in the Karawang region, east of Jakarta in Indonesia, and the goal for the battery plant is to enter mass production in the first half of 2024, the news agency reported.
The joint production plant will at first produce 10 GWh of battery cells annually, which will be enough to supply 150,000 electric vehicles a year; this capacity will later be increased, up to 30 GWh.
The joint venture was HMG and LGES was announced in mid-2021, in order for the automaker to secure a stable supply of battery cells for the production of its EVs. At this time, the two companies confirmed that they have signed a memorandum of understanding (MoU) with the Indonesian government for the battery cell manufacturing JV, which was first reported in June 2020.
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