This 100MW plant will be built on the Asahi site near Ballina in north Mayo. Forty jobs will be onsite at the plant, while the remainder will be involved in back up services.
Wood will be used from both State and private forests in the area. Peat will also be purchased, while coal will complete the fuel mix.
Mayo Power Ltd is a special purpose project company, jointly owned by Rockland Mayo Holding Company, an associate of Rockland Capital, and Myles Staunton of Westport.
Rockland Capital’s investment in Mayo Power is backed by Weichert Enterprise, a US privately owned fund which is managed by Gerard C Crotty.
Mr Crotty, a director of Mayo Power, said: “I am delighted to be involved with this exciting project, which has the potential to be of major benefit to the country in terms of its electricity needs”.
Similar projects will be considered, if this project does well, he said.
Mr Staunton, a former Fine Gael TD, said yesterday he will hold a “substantial minority stake in the business”.
The Bellacorick power station in the area closed recently with the loss of 300 jobs.
The fuel generated will be sold into the market North and South.
Planning permission still has to be granted and that could materialise within the next six months.
At this stage, investors in the business are Mr Crotty’s backers. But Irish investors will be “welcome to join in the project at a later date”, he said.
Mr Staunton said the new generating station would be a significant boost to farmers involved in forestry in Mayo, who until now had no outlet for their timber.
In a separate development, Viridian Group, in the North, announced the arrival yesterday of a state-of-the-art gas turbine for its second major power station in Huntstown, north Dublin.