Hyundai Motor Group-LG Energy Solution Secure $700 Million Investment for Indonesian Battery Joint Venture

[Asia Economy Reporter Yoo Hyun-seok] Hyundai Motor Company, Kia, Hyundai Mobis, and LG Energy Solution's joint battery cell factory under construction in Indonesia is expected to gain momentum in its project progress due to smooth investment fund procurement.

According to Hyundai Motor Company, Kia, Hyundai Mobis, and LG Energy Solution, they recently secured $710 million in investment funds for the Indonesian battery cell joint factory through overseas financial institutions, announced on the 22nd. Despite the global trend of interest rate hikes and uncertain economic conditions making fund procurement difficult, the project received high evaluations and prospects, enabling successful long-term borrowing at low interest rates.

The borrowing period is a total of 10 years, and the joint venture will sequentially draw funds from five overseas financial institutions according to the project progress stages. Hyundai Motor Company, Kia, Hyundai Mobis, and LG Energy Solution, which established the joint venture, provided debt guarantees according to their shareholding ratios for fund procurement. Additionally, credit guarantees from the public export credit agency, Korea Trade Insurance Corporation, facilitated smooth fund procurement.

Previously, in August last year, the investors established the battery cell joint venture in the Karawang Industrial Complex near Jakarta and agreed to invest approximately $1.1 billion. The joint factory is scheduled to be completed in the first half of 2023. Mass production of battery cells is planned to begin in the first half of 2024.

With this investment fund secured, the Indonesian project by the investors to stably supply battery cells optimized for electric vehicle dedicated models is also expected to proceed smoothly.

This content was produced with the assistance of AI translation services.