The Department of Energy conditionally committed to loan Li-Cycle Holdings (NYSE:LICY) $375 million to develop North America’s first recycling facility for battery-grade lithium, officials announced on Monday.

Li-Cycle’s 65-acre, 14-building facility in Rochester, N.Y. will form the center of the company’s “Spoke & Hub” business model, with the potential to achieve a 95% recycling efficiency rate and support the battery needs of hundreds of thousands of vehicles, according to a promotional video.

The company currently operates four “spoke” facilities in North America capable of processing more than 50,000 metric tons of lithium-ion battery material annually. The facilities produce an intermediate product containing critical minerals called “black mass,” which will be sent to the Rochester Hub for further processing into battery-grade materials.

Once operational, the Rochester Hub will become a domestic source of recycled and reusable battery materials, producing up to 8,500 metric tons of lithium carbonate, 48,000 tons of nickel sulphate and 7,500 tons of cobalt sulphate, according to Li-Cycle.

DOE’s loan is from the Advanced Technology Vehicles Manufacturing (ATVM) program, which was created to support critical infrastructure or technology projects deemed too risky by financial institutions and recently received a massive infusion of funding from the Inflation Reduction Act (IRA).

In January, the ATVM program also gave a $700 million conditional loan to a Nevada lithium mining project. (See Nev. Lithium Project Close to Securing $700M DOE Loan.)

Li-Cycle’s loan, which has a term of 12 years and an interest rate equal to the U.S. Treasury’s 10-year rate (currently 3.92%), remains conditional until the company satisfies DOE financing procedures.

In a livestream of the announcement, Senate Majority Leader Chuck Schumer (D-N.Y.) told attendees that the DOE’s loan will not only bring jobs to New York and revitalize the Rochester industrial area, but “make America the center of electric car and electric battery production in the world.”

Doreen Harris, CEO of the New York State Energy Research and Development Authority, said that Li-Cycle’s facility is “representative of what we need to be doing at scale” and represents “the technologies of the future … that will be necessary to achieve the deep levels of decarbonization across all sectors of the economy.”

Li-Cycle said it received key environmental permits for the Rochester Hub last year and expects to commission the plant late this year. The project is expected to create about 270 permanent jobs and more than 1,000 jobs during construction.