SK on wins $9.2 billion policy loan from U.S. Energy Department

[Photo provided by SK on]

BlueOval SK, an EV battery joint venture between South Korea’s SK on Co. and Ford Motor Co. in the U.S., has received provisional approval for a $9.2 billion policy loan from the U.S. government. Final approval is expected to be granted as early as the end of this year, boosting the construction of a planned battery factory capable of supplying batteries for 1.2 million electric vehicles annually.

On Thursday, SK on announced that BlueOval SK received conditional approval for a maximum of $9.2 billion in policy loans from the U.S. Department of Energy (DOE). The department has been providing low-interest funding to automobile and related component manufacturers through the Advanced Technology Vehicle Manufacturing (ATVM) program.

“BlueOval SK plans to finalize the contract and secure the benefits as early as this year,” said an SK on spokesperson. The $9.2 billion loan represents the largest-ever financial support for battery manufacturing.

SK on will borrow $11.8 billion at U.S. Treasury bond interest rates. As of Thursday, the yield on the U.S. 10-year Treasury bond stood at 3.76 percent. Considering the recent surge in funding costs, this borrowing cost is relatively low.

SK on has recently successfully concluded a series of fundraising efforts, signaling positive prospects for its investment plans, particularly in the U.S. The total amount raised by SK on since July last year now amounts to 22.4 trillion won ($19.8 billion).

SK on has successfully completed a series of financings in recent years, giving a green light to its investment plans. Since July of last year, SK on has raised $2.24 trillion in total.