05:57 PM EDT, 10/16/2024 (MT Newswires) -- Calumet (CLMT) said late Wednesday the US Department of Energy awarded a conditional commitment for a loan guarantee of up to $1.44 billion to fund the construction and expansion of a renewable fuels facility owned by its Montana Renewables unit.

The first tranche of about $778 million is expected to close in Q4, with the rest to be disbursed through a delayed draw construction facility from the start of construction in 2025 through the projected completion of the MaxSAF project in 2028, Calumet said. The loan will have a 15-year tenor, if finalized.

At the initial closing, a $150 million equity investment will be made, the company said. "Retained earnings from MRL will supplement DOE funds to maintain a 55/45 debt-to-equity ratio during the MaxSAF construction sequence," Calumet said.

The company's shares were up about 19% in after-hours activity.

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