The funding will be used by RDA to develop the business case for the proposed $800m bio-energy project at Pentland, near Charters Towers in North Queensland.

RDA will undertake growing and irrigation trials, due diligence and preliminary work related to the future engineering and construction services.

The business case, which is planned to be completed by November 2016, is critical for securing lending and investment finance for the plant’s construction phase.

The renewable biofuel production facility is designed to produce up to 350 million liters of fuel grade bio-ethanol per year while increasing Australia’s biofuel production by 80%.

Arena CEO Ivor Frischknecht said that the project is expected to become landmark development for Australia’s bioenergy industry.

"The fuel is earmarked for sale under a proposed off-take agreement with a global agriculture and energy corporation and export through the Port of Townsville."

The project is expected to provide knowledge on the commercial viability of second generation ethanol production technology with potential to be shared with the bio-energy industry.

Fuel from the plant will be sold to global agriculture and energy corporations under a proposed off-take agreement. It will be exported through the port of Townsville.

In addition to growing own sugarcane and sweet sorghum for biofuel production, RDA will process biomass waste with advanced processing techniques allowing the plant to be entirely self sufficient, renewable and independent of the grid.

Additionally, the plant’s ‘lignin’ by-product will be used to fuel a 32MW co-generation power plant. The excess lignin will be sold as biofuel pellets.

Frischknecht added: "RDA will identify technical, financial and regulatory developmental roadblocks affecting projects of this scale and type.

"Importantly, the anticipated fuel price could be competitive with petrol, making ethanol a much more viable long-term renewable fuel."