Norwegian battery-maker Freyr has signed a long-term deal with compatriot hydropower giant Statkraft to power the Nordic country’s first gigafactories.

The “binding” heads of terms agreement is based on delivery of some 1.4TWh of renewable power, with “guarantees of origin”, between 2024-2031 as Freyr builds two lithium-ion battery cell manufacturing plants in Mo i Rana, in Nordland, just south of the Arctic Circle.

“Our ambition is to produce clean battery cells, and a key element of our strategy is to power our operations with renewable energy. This agreement with Statkraft ensures that our production facilities in Mo i Rana will have a steady, long-term supply of hydropower from local sources – keeping our carbon footprint to a minimum as we speed forward to full operations,” said Freyr EVP for operations, Tove Nilsen Ljungquist.

Statkraft EVP for market & IT, Hallvard Granheim, said: “Statkraft contributes to the green shift by providing renewable power to existing customers and new industrial entrants around the world.

“Together with flexible hydropower, batteries are essential for a net zero future.”

The power for Fretyr’s factory sites will be sourced from Statkraft’s 500MW Rana hydropower plant, which annual generation of some 2,150GWh.

Freyr became a publicly listed company in January 2021 through a business combination with Alussa Energy Acquisition, raising some $850m in equity to develop battery manufacturing capacity in Norway.