Electrovaya, a lithium-ion battery manufacturer in Canada, has closed a US$50.8mn direct loan from the Export-Import Bank of the United States (US Exim) to support construction of a factory in Jamestown, New York.

The tenor is six years from initial drawdown, including one year of only interest payments followed by five years of interest and principal payment. The rate is not yet finalised, but is expected to fall between 6% and 7%, according to Electrovaya.

Though the loan was secured in November 2024, the company did not meet the requirements to begin drawdown until now.

It is also supported by a US$20mn senior secured asset-based revolving lending facility from the Bank of Montreal’s corporate finance division. This facility has a term of three years, with a US$5mn accordion feature to support future growth if required.

The majority of the US Exim proceeds will go towards equipment costs for setting up the company’s lithium-ion battery manufacturing plant, with a small portion for construction and engineering.

Electrovaya says the factory will create over 250 jobs and support its exports to Japan, Canada and Australia, as well as developing US supply chains for lithium-ion battery production. The company currently produces its batteries in Canada.

Funds are disbursed under US Exim’s ‘Make More in America Initiative’, which supports businesses in critical industries seeking to expand manufacturing in the US.

The programme, launched in 2022 under then-President Joe Biden, enables companies to obtain support from the export credit agency even if the majority of the product will not be exported.

The initiative has expanded rapidly, with the agency US$2bn of domestic financing in its pipeline.

Lithium-ion batteries are used in most complex electronics, including laptops, electric vehicles and phones, but are also used as storage for renewable energy, leading to groups like the Center on Global Energy Policy at Colombia University describing them as vital to “the future of transportation and energy storage.”

Lithium itself is in high demand for this reason; in February, US Exim announced a scheme to finance imports of lithium and other critical minerals.

Although the plans for the factory predate the beginning of US President Donald Trump’s second term in January, moving production across the border will also enable Electrovaya to avoid the proposed tariffs on its home country, which are currently on hold until early April.