Kedco energy project delayed

KEDCO — the Cork- based alternative energy company — has said that financing constraints mean its planned gas energy generation project in Newry is unlikely to get under way before the second half of this year, but it is hoped further investment will be forthcoming for the project.

The AIM-listed company announced, in December, that it had signed a joint venture agreement on a £15 million, four megawatt electricity-generating “gasification” plant in Newry, with £5m of the financing coming from Kedco and the rest from bank debt.

However, Kedco has now said that it has been unable to secure finance “on suitable terms”, to date and has incurred “significant costs” relating to the project.

In a statement published yesterday, the company said: “Due to the lack of debt finance, the board does not currently expect to commission the Newry plant in the current financial year to June 30, 2010.”

However, it added that management remains confident of finding a suitable funding partner to move forward the project.

“The company is in continued discussions with potential funders around the provision of bank debt for the Newry project.”

Yesterday’s statement added that the Kedco board is confident that suitable investment will be secured, but in the absence of any such investment “the board would pursue alternative means of maintaining adequate cash reserves, including management of its working capital position”.

Kedco’s £5m investment has already been largely made via cash payments. The plant was ready for installation before Christmas.

It was actually due to be commissioned earlier in 2009, but was held up due to a delay in the shipping of equipment from suppliers in the US.

In the December announcement, Kedco said commissioning of the project would take place in early 2010.