Sept 28 (Reuters) - Australia's Lake Resources NL LKE.AX said on Tuesday Canada's Export Credit Agency has expressed interest in providing low-cost finance for the company's $540 million Kachi lithium development in Argentina, in the latest sign of confidence in the project.

Lake Resources said Export Development Canada had advised it was interested in joining UK Export Finance to provide 70% of the total finance required for the development of the project.

The inclusion of the Canadian agency would not increase the level of potential project financing for the project in Argentina, home to the world's third-largest reserve of the material that is key to batteries for electric vehicles, but does increase sourcing flexibility.

"Having Canada's direct sovereign lending alongside the UK's sovereign support considerably de-risks the project for the investors and the international banks who continue to express strong interest to be part of Kachi's development," Lake Resources Managing Director Steve Promnitz said.

He added that the company "has significant work" to do to convert the expressions of interest from both export credit agencies into committed funding arrangements, but the agreements created a road map.

Lake Resources announced last week it had partnered with California-based Lilac Solutions to jointly develop the Kachi project. Lilac will provide clean technology expertise and invest about $50 million in development, allowing it to take a

25% in future.

The project is expected to produce 25,500 tonnes per annum from 2024 with possible expansion to 50,000 tonnes. Lithium's price has surged over the past year amid booming demand for batteries that use the white metal in a global push towards greener modes of transport.

(Reporting by Sameer Manekar in Bengaluru; editing by Jane Wardell)

((Sameer.Manekar@thomsonreuters.com; +918061823447;))