Spanish carmaker SEAT said Wednesday that it plans to build Spain’s first electric car battery plant as part of a 10-billion-euro investment in the country’s electric car initiative.

The Spanish government said last year that it would convert the country’s car manufacturing industry, the second-largest n Europe, with funds from the European Union’s post-pandemic recovery plan.

SEAT, which is part of the Volkswagen Group, plans to build the battery plant in Sagunto, a town near the eastern city of Valencia. The company said the Volkswagen Group would also electrify SEAT’s existing car plants in the northern city of Pamplona and Martorell, a town near Barcelona.

SEAT President Wayne Griffiths said the 10 billion-euro investment would allow the company to make electric cars for both domestic sales and the European export market. SEAT had already committed to producing an electric car in the 20,000- to 25,000-euro ($20,000-25,000) range.

“This project will democratize access to sustainable mobility in Europe with electric cars made in Spain,” Griffiths said.

The announcement included the acceptance by SEAT of an offer of 397 million euros ($399 million) from Spain’s government that came from Europe’s EU’s Next Generation funds.

Spanish Prime Minister Pedro Sánchez celebrated the deal. The Spanish government has described electric vehicles as a priority that would both create quality blue collar jobs and meet Europe’s ban on sales of new gasoline and diesel cars by 2035.

“Magnificent news that Volkswagen Group and SEAT reaffirm their commitment to Spain to transform their plants in Martorell and Pamplona and to build a battery factory in Sagunto as part of our electric car initiative,” Sánchez wrote in Spanish on Twitter.

“We are re-industrializing our country and leading the energy transition,” he said.

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