Plug Power surges on DoE loan guarantee

Plug Power (NASDAQ:) stock surged Tuesday on news that it has received a conditional commitment for an up to $1.66 billion loan guarantee from the Department of Energy’s (DOE) Loan Programs Office.

The loan guarantee is to finance the development, construction, and ownership of up to six green hydrogen production facilities.

“We appreciate the partnership with the DOE Loan Programs Office and are pleased to have worked through an intensive due diligence process,” said Plug Power CEO Andy Marsh. “The loan guarantee will prove instrumental to grow and scale not only Plug’s green hydrogen plant network, but the clean hydrogen industry in the United States.”

Reacting to the news, analysts at RBC Capital said the receipt of a conditional commitment “marks a big step forward in the loan approval process.”

“PLUG is currently working to fulfill terms of the conditional commitment and working through the NEPA permitting process to assess the environmental impact of the first project (Texas),” explained the bank.

Analysts add: “Assuming the environmental assessment is determined to not be significant, we estimate funding could begin toward the end of 2024. Following the final acceptance of the first project, PLUG will have 8 years to submit for the other 5 projects that would fall under the loan.”

Analysts stated: “We expect the company to ultimately close these deals starting with existing facilities providing the company with additional liquidity and mitigate one of the key short theses on the company.

“While timing for closing of the loan guarantee is still TBD, this announcement is a significant step forward in the process.”

Analysts said that following the announcement, they “expect that the company’s previously discussed Texas plant would be the first plant

submitted for a finalized guarantee following the federal NEPA process, with funds potentially beginning to flow by year-end & potential recovery of already-incurred capex assuming the guarantee documentation is finalized.”