Li-S Energy (ASX:LIS) was awarded an AU$7.8 million Advancing Renewables Program (ARP) grant from the Australian Renewable Energy Agency to develop a battery cell manufacturing facility, according to a Tuesday filing with the Australian bourse.

The facility will target production of up to 1 million kilowatt-hours per year, a 500 times increase from the production capacity of the company's existing facility, the filing said.

The company will start Stage 1 activities immediately and will complete feasibility and optimisation studies within a year, the filing said.

Shares of the company rose past 8% in recent Tuesday trade.