Virginia Approves $450 Million in Project Grants

On April 6, 2026, Virginia Governor Abigail Spanberger signed a slate of project-specific incentive bills in Richmond that together authorize roughly $450 million in performance-based state grants tied to about $7.1 billion in private investment and 3,250 new jobs. Three advanced-manufacturing and pharmaceutical projects anchor the package, Avio USA (solid rocket motors), Hitachi Energy (grid transformers), and Eli Lilly (active pharmaceutical ingredients), each authorized through paired House and Senate bills and structured as capped, multi-year grants that pay out only as the companies hit their investment and hiring targets. A fourth pair of bills, for AstraZeneca's Albemarle County medicines plant, carries the largest single cap of the group. The Avio bills were formally approved the day of the ceremony. The Virginia Legislative Information System records the remaining six bills as approved by the Governor on April 13, 2026, with all eight taking effect July 1, 2026.

The measures clear custom incentive packages that Virginia's Major Employment and Investment (MEI) Project Approval Commission vetted for projects too large for the state's standard discretionary programs. Most trace to the pipeline built under former Governor Glenn Youngkin and were announced between September 2025 and February 2026. The General Assembly passed every bill with bipartisan support, and no bill drew more than six votes in opposition in either chamber. Rather than cash at closing, each deal appropriates a fixed annual ceiling over a defined term and conditions every payment on audited performance, the model Virginia now uses to compete for capital-intensive manufacturing.

The projects map to three federally prioritized supply chains: defense propulsion, grid equipment, and pharmaceutical reshoring.

The Project Packages

Avio USA will build an 860,000-square-foot solid rocket motor plant in Hurt, backed by up to $97.7 million in state grants. The U.S. subsidiary of Italy-based Avio will invest more than $537 million and create more than 1,500 jobs in Pittsylvania County's Southern Virginia Multimodal Park, producing motors for defense, tactical propulsion, missile systems, and commercial space. HB1531 (Del. Luke Torian) and SB835 (Sen. L. Louise Lucas), introduced at the Governor's request on February 24, 2026, create the Solid Rocket Motor Manufacturing Grant Fund. The state will pay up to $6 million per fiscal year from July 1, 2027 through July 1, 2046, capped at $97,723,000 in the aggregate, the same figure the MEI Commission approved as a special appropriation when Avio announced the project on February 23, 2026. The enrolled bills condition the grant on a capital investment of at least $537,570,000 and the creation and maintenance of at least 1,546 new full-time jobs. The House passed HB1531 96 to 2 and the Senate passed it 39 to 0. The Governor approved both bills on April 6, 2026 (Chapters 326 and 349). State officials call it the second-largest economic development project in Southern Virginia history.

Hitachi Energy's $457 million transformer expansion in Halifax County carries up to $29.4 million. The new plant, alongside the company's existing South Boston campus, will manufacture large power transformers for high-voltage transmission, power generation, and AI data center loads. HB799 (Del. Torian) and SB403 (Sen. Lucas and Sen. Tammy Brankley Mulchi) establish the Power Transformer Manufacturing Grant Fund, paying up to $4.6 million per fiscal year from July 1, 2026 through July 1, 2035, contingent on the company meeting its 825-job and $457,157,000 investment commitments. The package was first disclosed when the project was announced on September 5, 2025, alongside a 10-acre land donation and fee waivers from Halifax County. HB799 passed the House 93 to 4 and the Senate 39 to 0.

Eli Lilly's API facility in Goochland County is the largest of the three anchor packages, at up to $130 million. Lilly will invest more than $2.1 billion, the first phase of a buildout the company has valued at up to $5 billion, to produce active pharmaceutical ingredients for its bioconjugate and monoclonal antibody portfolios, aimed at cancer, autoimmune, and other advanced therapies. HB800 (Del. Torian and Del. Virgil Thornton) and SB404 (Sen. Lucas) create the Active Pharmaceutical Ingredient Manufacturing Grant Fund, paying up to $15 million per fiscal year from July 1, 2026 through July 1, 2045, capped at $130 million in the aggregate. The $130 million ceiling matches the special appropriation the MEI Commission approved in September 2025, keyed to a $2,148,793,019 investment and 468 new full-time jobs. The larger $5 billion figure and the 650 jobs Lilly has announced sit outside the statutory threshold. HB800 passed the House 94 to 3 and the Senate 39 to 0, and SB404 passed the Senate 38 to 0 and the House 97 to 0.

AstraZeneca's Albemarle County plant carries the largest cap of the four, at $191,255,000. HB1076 (Del. Amy Laufer and Del. Katrina Callsen) and SB527 (Sen. Creigh Deeds) create the Pharmaceutical Substance Manufacturing Grant Fund, paying up to $34 million per fiscal year from July 1, 2026 through July 1, 2045, conditioned on at least $4 billion of capital investment and 500 new full-time jobs. The company has since raised its announced commitment to $4.5 billion at the Rivanna Futures site near Charlottesville, where it plans to make oral GLP-1 and other small-molecule metabolic drugs and antibody-drug conjugates. HB1076 passed the House 92 to 5 and the Senate 39 to 0. Exhibit 1 summarizes the four packages.

Together, the three anchor packages authorize up to roughly $257 million. Adding AstraZeneca's $191.3 million fund brings the four April enactments to about $448 million in aggregate state commitments, against roughly $7.1 billion of committed private capital and 3,339 jobs at the statutory thresholds (the Governor's announcement cites 3,250). Because every fund is capped both annually and in total, those figures are ceilings. A company that falls short of its investment or hiring targets in a given year forfeits that year's installment, and no fund can pay more than its aggregate cap regardless of how far the project exceeds its commitments.

Performance-Contingent by Design

Every grant is capped, back-loaded, and paid only after the company delivers. The awards are paid over nine to nineteen years rather than upfront, with annual installments capped and tied to performance benchmarks fixed in a memorandum of understanding with the Commonwealth, including specific investment levels and job-creation targets. In practice, these incentives work as reimbursements earned against milestones. The project's financing has to carry it through construction and ramp, and the state grant arrives only after targets are met.

Measured against the commitments, the packages vary widely. Hitachi Energy's grant works out to about $35,600 per job and 6.4 cents per dollar of investment. Avio's is about $63,200 per job but 18 cents per dollar invested, the highest of the four, reflecting a labor-intensive plant with 1,546 jobs on a $537 million build. Lilly's runs to roughly $278,000 per job and 6 cents per dollar on the $2.15 billion first phase, or under 3 cents per dollar measured against the $5 billion buildout. AstraZeneca's is about $383,000 per job and 4.8 cents per dollar on the $4 billion statutory investment threshold. The per-job spread reflects capital intensity, since the two pharmaceutical plants put far more capital behind each hire than the rocket motor plant does.

Because they run through the MEI Commission and the budget, these packages are set in statute. That makes them more durable once enacted but slower to assemble, because a project must clear MEI review and secure paired legislation before the grant exists. The Avio package illustrates the fast end of that track. The MEI Commission approved the special appropriation and the company announced on February 23, 2026. The bills were introduced at the Governor's request the next day, cleared both chambers by March 12, and were signed April 6. The Hitachi Energy, Lilly, and AstraZeneca packages were announced in September and October 2025, prefiled on January 13, 2026, the day before the session opened, and finished their legislative course between February 19 and March 2. The trade-off favors large, credit-worthy projects that can wait for the legislative calendar in exchange for a bankable, multi-year commitment.

What the Packages Mean for Companies and Suppliers

Virginia is legislating bespoke, bill-by-bill grants to win advanced-manufacturing and pharmaceutical capital. The four April projects span defense propulsion, grid equipment, and pharmaceutical reshoring, three federally prioritized supply chains, and each was matched to a purpose-built grant fund rather than an existing program. The approach gives the General Assembly line-item visibility into every large award, which is part of why the bills passed with so little opposition. Each bill put a named company, a fixed cap, and a defined job count before legislators.

For a project of sufficient scale, Virginia will write a custom package, but the terms will be performance-locked, MEI-vetted, and paid out over a decade or more. The grant is keyed to the statutory investment and job thresholds, which can sit below the commitments announced in press releases. Lilly's fund is keyed to $2.15 billion and 468 jobs even though the company has announced $5 billion and 650 jobs, and AstraZeneca's to $4 billion and 500 jobs against an announced $4.5 billion. The statutory floor sets the audited target for every installment.

Suppliers and regional developers have a two-year window. The four sites, Hurt in Pittsylvania County, South Boston in Halifax County, West Creek in Goochland County, and Rivanna Futures in Albemarle County, will drive construction and ramp procurement across 2026 to 2028. Hitachi Energy has said its new plant will be operational by 2028, and AstraZeneca has put its facility four to five years out from the October 2025 announcement. Exhibit 2 sets out the timeline from announcement to first installments.

What to Do Now

If your company is weighing a large manufacturing or pharmaceutical investment in Virginia, these packages show the state will write a custom grant for the right project. Payments are tied to verified investment and hiring, and every award runs through the MEI Commission and the General Assembly. If you want a read on fit before the 2027 session, reach out to our team.

References

1. Office of the Governor of Virginia, Governor Spanberger Signs Bills Into Law Welcoming 3,250 New Jobs, $7.1 Billion in Business Investment to Virginia, April 6, 2026.
2. Virginia Mercury, Spanberger signs bipartisan bills tied to billions in business investment across Virginia, April 6, 2026.
3. Manufacturing Dive, Virginia governor signs 4 laws establishing manufacturing grant programs, April 8, 2026.
4. Virginia Legislative Information System, 2026 Regular Session: HB1531 and SB835, Solid Rocket Motor Manufacturing Grant Fund (Avio); HB799 and SB403, Power Transformer Manufacturing Grant Fund (Hitachi Energy); HB800 and SB404, Active Pharmaceutical Ingredient Manufacturing Grant Fund (Eli Lilly); HB1076 and SB527, Pharmaceutical Substance Manufacturing Grant Fund (AstraZeneca).
5. LegiScan, Virginia 2026 Regular Session bill histories and enrolled summaries: HB1531, SB835, HB799, SB403, HB800, SB404, HB1076, SB527.
6. Avio, Virginia Approves Incentive Package for New Avio USA SRM Factory, February 23, 2026.
7. Virginia Economic Development Partnership, Eli Lilly and Company Invests $5 Billion in Virginia, September 16, 2025.
8. Cardinal News, Hitachi Energy to invest $457 million, add 825 jobs in Halifax County, September 5, 2025.
9. AstraZeneca, AstraZeneca plans to increase investment and scope of its Virginia manufacturing facility to $4.5 billion, creating 3,600 new jobs, October 9, 2025.

© Copyright 2026 TC Policy Group, LLC (d/b/a Crawford Partners). The views expressed herein are those of the author(s) and not necessarily the views of Crawford Partners, its management, its subsidiaries, its affiliates, or its other professionals. Crawford Partners is not a law firm and cannot provide legal advice.