A $375 Million Government Loan Boosts Li-Cycle Stock

After the firm said it had acquired a conditional commitment for a $375 million loan from the Energy Department's Loan Programs Office, shares of the upstart battery recycling company Li-Cycle increased 8% premarket on Monday.

‍

The money will go toward building a Li-Cycle recycling plant close to Rochester, New York, which the company claims will assist supply essential resources like lithium by recycling the metals from old batteries. Before the company can actually receive the financing, it must first fulfill a number of requirements, which might take more than a year.

‍

The Loan Programs Office recently announced that it will finance Redwood Materials, a different recycling business, $2 billion for a sizable facility in Nevada.

‍

It will take several years before enough automobile batteries are recycled to make the business widely accepted, but battery recycling is regarded as a crucial supply of essential raw materials for batteries and electric cars.

‍

The Loan Programs Office, headed by former sustainable energy entrepreneur Jigar Shah, aims to offer debt financing for crucial infrastructure projects that are frequently too risky or involve too much technology risk for big banks to undertake.

‍

The LPO is aiming to send billions of dollars out the door before next year's presidential election, which might reduce its authority if Republicans take back the White House. The LPO recently gained extra firepower under the new climate law known as the Inflation Reduction Act.