The US International Development Finance Corporation (DFC) has signed a letter of interest (LOI) to offer a $765m loan to support Eastman Kodak’s new arm, Kodak Pharmaceuticals.

Kodak Pharmaceuticals is set to produce critical pharmaceutical components.

The project is based on the US President Donald Trump’s executive order that allows the DFC and the US Department of Defense (DoD) to partner to improve domestic response to the Covid-19 pandemic.

DFC CEO Adam Boehler said: “Addressing the unprecedented challenges we face today – and preparing for future crises – requires innovative ideas and partnerships.

“Today, we are bringing together the significant resources and expertise of the private sector and US Government. Our collaboration with this iconic American company will promote health and safety at home and around the world.”

Kodak Pharmaceuticals will produce pharmaceutical components considered essential but lapsed into chronic national shortage, as defined by the US Food and Drug Administration (FDA).

Though US citizens consume about 40% of the world’s bulk components supply used for generic pharmaceutics production, only 10% are manufactured in the US. This initiative with Kodak could reduce the country’s dependency on foreign sources.

Kodak will leverage DFC’s loan to support its startup costs required to repurpose and expand its existing facilities at Rochester in New York and St Paul in Minnesota. The funds will also facilitate continuous manufacturing and advanced technology capabilities.

When fully operational, Kodak Pharmaceuticals will be able to produce up to 25% of active pharmaceutical ingredients used in non-biologic, non-antibacterial, generic pharmaceuticals.

The project could create 360 direct jobs as well as 1,200 indirect jobs.

Kodak executive chairman Jim Continenza said: “By leveraging our vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”