Eos Energy Enterprises closed on a $303.5 million loan guaranteed by the U.S. Department of Energy’s Loan Programs Office, the manufacturer of zinc-based long duration energy storage systems said Monday.
Eos plans to use the loan to expand its capacity at a battery manufacturing plant in Turtle Creek, Pennsylvania, to 8 GWh annually by 2027 by building four automated manufacturing lines, the company said. It has one line in commercial operation.
The loan guarantee currently covers two manufacturing lines, according to DOE. Pending additional LPO approvals and an environmental assessment under the National Environmental Policy Act, two additional lines would be covered, the department said.
As of Sept. 30, Eos had a $589 million order backlog representing about 2.3 GWh and $14.2 billion commercial pipeline totaling about 59 GWh, Eos said in a Nov. 6 earnings presentation. Last month, Springfield, Missouri’s municipal utility agreed to buy Eos batteries totaling 36 MW with a six-hour duration.
In August 2023, the LPO conditionally awarded Eos a loan guarantee of up to $398.6 million. The lower final award reflects the project’s operational costs coming in below forecasts and an up to $315.5 million investment by Cerberus Capital Management announced in June, the Edison, New Jersey-based company said.
“The DOE loan guarantee, alongside our strategic investment from Cerberus, is expected to provide the capital required to build a profitable manufacturing business,” Nathan Kroeker, Eos chief financial officer, said.
The DOE loan facility allows Eos to make up to four draws on the guaranteed loan, subject to the company achieving certain milestones, with each tranche corresponding to the production, maintenance and development and operation of a given production line, Eos said in a U.S. Securities and Exchange Commission filing.
The loan facility matures on June 15, 2034, according to the filing.The guaranteed loans bear interest at U.S. Treasury rates plus a 0.375% spread.
Eos’ Z3 battery storage system is designed to be safe, flexible, scalable, sustainable and made in the United States using mostly in-country raw materials, the company said in a Nov. 6 quarterly report with the SEC. The Z3 battery module is the only U.S.-made module that provides utilities, independent power producers, renewables developers and commercial and industrial customers with an alternative to lithium-ion and lead-acid monopolar batteries for three- to 12-hour discharge applications, Eos said.
Eos said the Inflation Reduction Act gives it a competitive edge through production tax credits that can be claimed on domestically-made battery components and tax credits for customers with projects that satisfy domestic content requirements.
In the first nine months this year, Eos incurred a $417.7 million net loss and had $111.3 million in negative cash flows from operations, according to the filing.
