Novonix (NVX) said late Monday that the US Department of Energy, through the Loan Programs Office, has offered a "conditional commitment" for a direct loan of up to $754.8 million.

The loan, consisting of $692 million in principal and $62.8 million in capitalized interest, is intended to finance the construction of a synthetic graphite manufacturing plant in Chattanooga, Tennessee, primarily for use in electric vehicle batteries.

The financing is being offered under the DOE's Advanced Technology Vehicles Manufacturing Loan Program, according to the company.

The plant is expected to produce 31,500 tonnes per annum of synthetic graphite at full capacity, supporting the production of lithium-ion batteries for about 325,000 EVs annually, Novonix said.

The loan will be structured in two tranches, with terms of 15 years and 10 years, based on the phased completion of infrastructure and production lines.

The first tranche will support the site and infrastructure for the new facility and 21,000 tonnes per annum of production capacity, while the second tranche will fund an additional 10,500 tonnes per annum of production capacity.

An additional tranche may be provided to fund eligible project costs, and this will be subject to repayment upon the monetization of any tax credits related to the project under the Qualifying Advanced Energy Project Allocation Program.

Shares of Novonix were up nearly 19% in after-hours trading.