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Flight of Chinese investor leaves 200m-euro hole in planned biofuels plants

A Finnish firm is looking for new funding after Chinese investors pulled out of planned biofuels plants in Myllykoski and Savonlinna in southeast Finland. According to the daily Kouvolan Sanomat, the 200 million-euro deal fell through because the Chinese financier wasn’t able to pull together funding for the renewable energy projects.

UPM's shuttered paper factory in Myllykoski was to have been the site of a bioethanol plant. Image: Raine Martikainen / Yle

Proposed biofuel plants to be constructed in Myllykoski and Savonlinna in southeast Finland have been left high and dry after a Chinese investor announced that it would no longer be forking out the 200 million euros required to bankroll the facilities.

The investment was to be almost equally divided between the two proposed biofuels plants; however the Chinese firm announced that it had not been able to gather the agreed sum.

"At the time it felt too good to be true and it turned out that it was," said Aate Laukkanen, chief executive of Suomen Bioetanoli, a bioethanol company based in Myllykoski in Kouvola, southeast Finland.

The company had plans to construct a straw-based bioethanol plant at the premises of the former Myllykoski paper miII in Kouvola.

The Shenzen company was supposed to sign the financing agreement in March this year so that the facilities could begin production in June 2019.

"Years of work wasted"

Back in February, Laukkanen still believed that the projects would take shape. However, he received information that the Chinese would not be coming on board in early July.

"It’s a shame that years of work will go to waste and money has also been spent on different reports," the CEO lamented.

Laukkanen said that the establishment of a bioethanol plant on the premises of UPM’s shuttered paper factory in Myllykoski now seemed highly unlikely.

In 2014, the Ministry of Employment and the Economy handed over 30 million euros in energy grants to the planned bioethanol plants in an arrangement that is valid until the end of July. Laukkanen said that he intends to file for a continuation of the programme.

"I can’t be very hopeful. I will still apply for the extension, although it’s unlikely that I’ll be granted permission," he said.

The project faces a further setback in that UPM has already begun demolition work on the hearting plant at the paper factory.

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