EVgo Secures $1.248 Billion DOE Loan Guarantee for National EV Charging Expansion

EVgo Inc. (NYSE: EVGO) announced on December 12, 2024, that its subsidiary, EVgo Swift Borrower LLC, has entered into a loan guarantee agreement with the U.S. Department of Energy (DOE) to facilitate a term loan facility. This loan facility, the DOE Loan, arranged between the Borrower and the Federal Financing Bank (FFB), is aimed at supporting eligible projects as part of the Title XVII Loan Guarantee Program.

The DOE Loan, structured as a senior secured loan up to $1.248 billion, comprises $1.05 billion in principal and up to $193 million in capitalized interest. EVgo intends to utilize the funds from this loan to support the construction, deployment, and operation of around 7,500 new fast-charging electric vehicle stalls across the country. The first draw of approximately $75 million is expected in January 2025.

As part of the agreement, EVgo has put forth 1,594 existing stalls as collateral for the Borrower and may need to contribute additional stalls or cash over the Deployment Period. EVgo Services LLC, a subsidiary, will provide charge point operator services during the loan term.

The DOE Loan repayment terms involve quarterly payments commencing in March 2030, based on fixed interest rates and a repayment timeline extending up to March 15, 2042. EVgo’s obligations under the loan are secured by a first priority security interest in Borrower assets and equity interests, subject to certain exceptions.

The Guarantee Agreement includes customary representations, warranties, and covenants, with potential events of default triggering penalties and accelerated payments. Failure to comply with the loan agreement or any defaults could have a substantial impact on EVgo’s operations and financial health.

Furthermore, the agreement places restrictions on Borrower activities, limiting operational flexibility. Cash distributions to EVgo are subject to Borrower constraints, potentially affecting EVgo’s overall financial plans.

Looking ahead, EVgo acknowledges potential risks associated with the DOE Loan, including the need for additional funds, the performance of the Borrower, and limitations on Borrower’s ability to distribute cash. Factors beyond EVgo’s control could impact its ability to access necessary funds, potentially influencing its operations and network expansion plans.

While EVgo remains optimistic about the DOE Loan’s benefits for its EV charging infrastructure expansion, it emphasizes considerations regarding compliance, financial obligations, and risk mitigation strategies in the current financial landscape. Investors and stakeholders are advised to review comprehensive risk factors related to EVgo’s business and financial standing, as outlined in its SEC filings.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read EVgo’s 8K filing here.

About EVgo

EVgo, Inc owns and operates a direct current fast charging network for electric vehicles (EVs) in the United States. The company offers electricity directly to drivers, who access its publicly available networked chargers; original equipment manufacturer charging and related services; fleet and rideshare public charging services; and charging as a service and fleet dedicated charging services.