Berlin, 9 January 2024 (dpa/MIA) - Swedish company Northvolt was authorized by the European Commission on Monday to build a large battery cell factory for electric cars in northern Germany.

The German and Schleswig-Holstein state governments are subsidizing the project to a tune of around €700 million ($766 million), with guarantees for a further €202 million.

"This measure totalling €902 million is the first individual aid approved to prevent an investment from being relocated to a country outside Europe," said Margrethe Vestager, the EU commissioner responsible for competition.

It was subject to approval by the European Commission under state aid laws. Northvolt is also looking at the United States and Canada.

German Economy Minister Robert Habeck said: "I am very, very pleased that this is happening today."

Northvolt plans to manufacture battery cells for electric cars in a factory in Heide from 2026. The €4.5 billion investment is expected to create 3,000 jobs. The company has already invested around €100 million in the construction project, according to sources close to it.

The project will be the largest industrial project in Schleswig-Holstein for decades.

Northvolt had always emphasized the advantages of the west coast location of Heide. A lot of wind power is generated there on land and at sea - which the factory needs in large quantities.

The German government will supply around €564 million and the regional state up to €137 million of the funding, which will be spread over several annual instalments.

MIA file photo