Future of ISG gigafactory in balance as developer seeks emergency cash

The future of a £3.8bn “gigafactory” being built in Northumberland was cast into doubt this week as the company behind the project scrambled to secure funding to avoid collapse.

Reports on Monday said car battery manufacturer Britishvolt was making plans to go into administration but the BBC now claims an unidentified backer has been secured.

The firm’s plans to build a 95ha factory in Blyth have received support and funding from government and become a standard bearer for the levelling up agenda but recent months have seen the scheme stagger.

Main contractor ISG paused work in August as additional funding was sought and later that month Britishvolt revealed it had pushed its production plans back by more than a year.

Attempts to raise £200m to continue the project were understood to have failed and reported interest from buyers such as Tata Motors had not come to anything as of Monday, jeopardising hundreds of jobs at the firm.

Accountancy firm EY was reportedly lined up to carry out the administration but Britishvolt has refused to comment on what it calls “market speculation”.

According to the Financial Times, the company has only enough cash left to last another month without additional support.

The company was founded less than three years ago and has memorandums of understanding to manufacture batteries for UK car firms such as Aston Martin and Lotus.

Former prime minister Boris Johnson was a vocal supporter of the scheme and the company was promised £100m when Rishi Sunak was chancellor.

But the company has yet to see any of that money, as it had been earmarked for tooling the factory, a stage the project has not reached.

Administration could see a rush among foreign battery manufacturers to take over the factory site, which is thought to be among the best in Europe for battery manufacturing because of its deep seaport, rail links and clean energy.

Britishvolt is also building a £200m battery tech centre in the West Midlands, where Winvic is main contractor.