Plug Power has announced significant strides in securing over $1 billion in government funding and the initiation of liquid green hydrogen production at its Georgia facility, prompting a notable surge of approximately 20% in the company's shares during morning trading.
The hydrogen fuel cell firm disclosed the finalization of term sheet negotiations with the U.S. Department of Energy (DoE) for a $1.6 billion loan facility. According to Plug Power, the application has been submitted to the Credit Review Board for final considerations and issuance of a conditional commitment.
Addressing concerns over liquidity amidst supply challenges in the North American liquid hydrogen market, Plug Power had previously raised doubts about its continuity in November and had planned a $1 billion equity raise earlier this month.
Plug Power's CEO Andrew Marsh emphasized the significance of the forthcoming funding during an investor call, highlighting its pivotal role in advancing green hydrogen deployment in the United States through the development and construction of up to six hydrogen production facilities.
“With our Georgia plant operational, and the Tennessee plant coming online, we expect a significant reduction in costs,” Marsh stated, referring to the company's ongoing efforts to enhance operational efficiency.
The Georgia plant, touted as the largest liquid green hydrogen facility in the U.S. market, is designed to produce 15 tons per day (TPD) of liquid electrolytic hydrogen. Despite construction delays, Marsh affirmed the facility's strategic importance in bolstering Plug Power's supply chain and facilitating delivery to customers for various applications.
Craig Irwin, an analyst at Roth Capital Partners, commented on the DoE loan facility, expressing optimism about Plug Power's financial prospects. He noted, “The DoE loan facility seems well baked, but we have to wait until the second half of 2024. Seems they are getting the finance options they need and wiggling out of a very tight spot.”
Amidst the corporate push towards net-zero emission targets, hydrogen emerges as a pivotal zero-emission fuel and energy storage solution. Plug Power anticipates that its foray into liquid hydrogen production will yield positive impacts on its bottom line and fuel margin expansion, aligning with broader sustainability objectives.
