WASHINGTON - Energy Sec. Steven Chu announced that the Department of Energy has closed a $1.4 billion loan agreement with Nissan North America to help retool a Nissan Tennessee manufacturing plant to produce Nissan Leaf electric cars and the lithium-ion battery packs to power them. 

The loan was issued as part of the Advanced Technology Vehicles Manufacturing Loan Program, a $25 billion program authorized by Congress as part of the Energy Independence and Security Act of 2007. The program is designed to accelerate the development of vehicles and technologies that increase U.S. energy independence, create cleaner means of transportation and stimulate the American economy. 

"Nissan applauds the Department of Energy's support of the development of innovative, advanced vehicle technologies and the creation of clean energy jobs," said Scott Becker, senior vice president of administration and finance for Nissan North America. "Nissan is committed to zero-emission mobility. This loan, which will bring production of the Nissan Leaf to Tennessee, is a significant step in sustaining American jobs and American manufacturing." 

The loan will result in the creation of up to 1,300 jobs when the plants are operating at full capacity. Modification of the Smyrna, TN manufacturing plant, which will begin later this year, includes a new battery plant and changes in the existing structure for electric-vehicle assembly. When fully operational, the vehicle assembly plant will have the capacity to build 150,000 Nissan Leaf electric cars per year, and the new plant will have an annual capacity of 200,000 batteries, Nissan said. 

The Nissan Leaf, a five-passenger sedan, will be available for private and fleet customers. It is being launched in the U.S., Japan and Europe in December 2010. 

Nissan said it has "spearheaded a holistic approach to zero-emission mobility by working with states, municipalities, utility companies and other partners to prepare markets and infrastructure." The automaker has formed more than a dozen partnerships in the United States in markets including the state of Tennessee, the state of Oregon, Sonoma County and San Diego in California, Phoenix and Tucson in Arizona, Washington D.C., Seattle, Raleigh, and with Houston-based Reliant Energy.