The U.S. Department of Energy on Monday said it would provide General Motors and LG Energy Solution a loan to construct battery factories in three states.

The Energy Department announced the $2.5 billion loan for Ultium Cells LLC — a joint venture between the U.S. automaker and South Korean battery manufacturer — to build lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan as part of the Biden administration’s efforts to promote electric vehicles.

“As electric cars and trucks continue to grow in popularity within the United States and around the world, we must seize the chance to make advanced batteries — the heart of this growing industry — right here at home,” Energy Secretary Jennifer Granholm said.

The Energy Department’s Loan Programs Office offered the companies the loan through its Advanced Technology Vehicles Manufacturing program, which provides loan support to U.S. manufacturing of light-duty vehicles, qualifying components and materials that improve fuel economy.

The loan, which is conditional on the companies’ fulfilling certain requirements set out by the agency, would be the program’s first loan exclusively for a battery cell manufacturing project.

“We are grateful for the consideration and look forward to working with the Department of Energy on next steps,” Ultium spokesperson Brooke Waid told The Detroit News.

The program previously provided Tesla a $465 million loan to help produce its first sedan, the Model S.

The Energy Department said that the factories are expected to create 6,000 construction jobs and 5,100 operations jobs once at full capacity.

Ultium Cells have allotted about $2 billion to build each plant but GM spokesman Jim Cain told Detroit Free Press that the commitments “don’t preclude the joint venture from pursuing a loan” under the program.

“Assuming the loan is approved it would have the effect of lowering the amount of capital the joint venture partners would need to fund directly,” Cain said. “Ultium Cells will repay the loans with proceeds earned by selling its cells to GM.”

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