UK-based forestry management and timber processing business Active Energy (AEG) has received an unsecured loan facility of $6m for its first CoalSwitch plant in North America.

The CoalSwitch technology uses low-value wood by-products to produce biomass fuel, which can then either be mixed at any ratio with coal or completely replace coal in existing unmodified coal-powered fire stations globally.

The funding will be provided by Linarus, a private Dubai-based investment company controlled by a consortium of investors.

Part of PacifiCorp, major US utility Rocky Mountain Power (RMP) has recently conducted tests on the CoalSwitch to prove that it behaves better than coal.

"The funding unlocks our ability to commercialise our revolutionary and proven CoalSwitch technology and will enable us to generate meaningful revenues within the USA."

Active Energy's chief executive officer Richard Spinks said: “This is a landmark moment for AEG. The funding unlocks our ability to commercialise our revolutionary and proven CoalSwitch technology and will enable us to generate meaningful revenues within the USA, which is set to be one of our core geographic markets.

“Due to its ability to enable coal-fired power stations to meet strict green regulations without the need for expensive retrofit programmes traditionally required to accommodate biomass feedstock, we believe that CoalSwitch represents a potentially ground-breaking force in the market.

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“Therefore we look forward to providing further details and timescales regarding the development of AEG CoalSwitch, which will be transformative for the company and our customer base in the coming months.”  

RMP has plans to commercially use AEG CoalSwitch pellets to replace 10% of its coal feed at one of its Utah plants in 2017.