But for now, Eric Mathis is declining to name the venture capitalist, or even the proposed site for the biomass plant
Mathias is director of the JOBS Project, a loose network of organizations working to bring sustainable jobs to Appalachia.
He says he needs between $35,000 and $100,000 from local investors to build the power plant, which would burn biomass such as wood waste.
“We found a rare investor that is willing to invest in this community but he is not willing to invest in the predevelopment phase," Mathis said.
Mathis is a 31-year-old North Carolina native with degrees in philosophy and labor studies from Appalachian State University.
He says he came to Mingo County to work as a data analyst for the law firm Thompson Barney.
His current position with the JOBS Project is being funded through the Ohio Valley Environmental Coalition through a grant from the Mary Reynolds Babcock Foundation.
He says the local investment money for the biomass plant is part of the “flip model” used in the late 90s by a renewable energy company in Minnesota, Windustry.
The model is set up to allow large investors to take advantage of federal tax credits.
“They turn over the facility to the original community investors," Mathis said. "So after four to five years, those original investors that put up $35,000 are in 100% full ownership of the facility.”
But Lisa Daniels, executive director of Windustry, said her organization is moving away from the “flip business model.”
"The flip model is an old business model,” she said. “We are looking forward to new business models where people do not have to use smoke and mirrors and investment bankers from Wall Street to get a community renewable energy project in the ground."
Daniels urged local investors to do their research before getting involved in any renewable energy project.
“You have to figure out who’s behind the effort and are they capable of doing exactly what they’re saying they’re going to do,” she said.
Mathis says he is not willing right now to discuss where the facility will be located or give the name of the venture capitalist who he says has agreed to fund it.
All he would say is the investor is from Texas. He referred other questions to Mark Wilson of the business FRI Energy to find out more.
The Web site for FRI Energy has very little information about what the company is or who is behind it.
“When expertise meets experience the limits are endless. These are the ‘Progressive’ possibilities that we bring to our clients,” the Web site says.
Wilson described his company’s role in the proposed biomass plant.
“We will be providing the capital through use of our venture capital and our abilities to develop the project and produce the 99% up front," Wilson said.
"In turn we’ll get use to the tax credit, but we’ll also get the opportunity to do the development in the area.”
Wilson says FRI Energy is trying to secure permits and finalize the business plan for the biomass facility.
“We can hope for everything being constructed by the end of 4th quarter of 2010,” he said.
Building a renewable energy project in Mingo County will be a challenge, according to Randall Harris, director of project development with the Mingo County Redevelopment Authority.
“There are three hurdles you have to overcome in order to put an electric generation facility in West Virginia," Harris said.
"First, you have to get permission from whomever the Public Service Commission has authorized for electric production and sales in your area.
“Second, you have to make sure the interstate cooperative that manages the electric distribution system will allow you to put electricity in the grid,
“And third, you have to build the infrastructure to get electricity from your site to that distribution system.”
Harris has been trying to bring renewable energy projects to Mingo County for four years.
“It’s a daunting task,” he said.
“It takes lots of time before you get to the point where you can say, you’ve got a project ready to go," he said.
He says the authority plans to help bring a biomass facility to the region and it could happen within the next year, but there are no guarantees.
“West Virginia is littered with promises made and not kept,” he said.
“In economic development, the key is to get your project to the point where you know that it will actually go forward before you get the public overly excited.”