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China greentech company Envision to build EV battery plant in Spain

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MADRID (Reuters) - Spain has signed a partnership agreement with Chinese green energy company Envision Group to embark on four projects, including a battery plant for electric cars, with 3.8 billion euros ($3.9 billion) in total investment, partly funded by European Union aid.

Jose Dominguez, head of Envision Spain, was quoted in a statement from the Spanish government that the projects would be developed jointly with Spanish renewable power company Acciona Energia, but it did not say what its role would be.

The battery "giga-factory" in Navalmoral de la Mata in the central-western region of Extremadura, will require 2.5 billion euros in investment and could create as many as 3,000 jobs, the statement said.

Extramadura is one of Spain's poorest regions, where there are also large reserves of lithium.

It would be second electric car battery project in Spain - Europe's second-largest car producer.

German carmaker Volkswagen AG has said it and its and partners would invest 10 billion euros ($10.6 billion) to make electric vehicles and batteries in Spain.

Volkswagen aims to start building the 40-gigawatt-hour (GWh) plant in Sagunto near Valencia, which requires 3 billion euros in investment, in the first quarter of 2023, with serial production to start by 2026.

The Envision partnership agreement also includes a renewable hydrogen plant costing up to 900 million euros which will provide energy for a net zero emissions project, as will a wind energy park with a turbine assembly plant.

They will be built in the small towns of Alcazar de San Juan and Navas del Marques in central Spain.

A digital products development centre worth 300 million euros is also planned.

Spain will help to fund the investment with European Union pandemic relief funds, the government said, pointing out that it will not only promote energy transition but also support small municipalities suffering from depopulation.

($1 = 0.9811 euros)

(Reporting by Andrei Khalip, Emma Pinedo. Editing by Jane Merriman)

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