Oklo Inc., a U.S. company hoping to build micro nuclear power plants, said on Wednesday the energy logistics agency of the Defense Department has issued a notice of intent to award a power purchase agreement for a pilot reactor.

U.S.-listed shares of the company rose 25% in Wednesday trading.

WHY IT'S IMPORTANT

Nuclear power companies are seeking U.S. military contracts after President Donald Trump signed executive orders last month on boosting nuclear power.

In his first administration Trump also directed agencies to develop small nuclear reactors on military bases but that did not result in plants coming on line.

Oklo's project for the Air Force would produce up to 75 megawatts of electricity and usable heat. That's tiny compared to today's 1,000 MW on average reactors, but developers hope the smaller unit can be replicated easily in factories.

IS THE AGREEMENT FINAL?

No, but under the terms of the notice, Oklo would design, construct, own, and operate the power plant, delivering electricity and heat at Eielson Air Force Base in Alaska, under a long-term agreement.

The value of the deal was not disclosed.

The U.S. Nuclear Regulatory Commission denied Oklo an operating license in 2022. Oklo plans to reapply late in 2025 and hopes to receive one in 2027. Last month, Trump directed the NRC to issue licenses within 18 months.

WHAT HAPPENED THE FIRST TIME?

In 2023, the U.S. military made an initial agreement for Oklo to build a microreactor at Eielson by the end of 2027. But later that year the military withdrew the intent to award Oklo a more than $100 million contract.

PROLIFERATION CONCERNS

Some non-proliferation experts worry because Oklo's project would extract energy from plutonium which can be used in a nuclear weapon. Oklo says the plutonium would be wrapped up in other highly-radioactive substances which would make it nearly impossible use as fissile material.