Lignol Energy, a Canadian biofuel company, has agreed to make additional investment in A$80m ($72.64m) Australian biofuel plant owned by Territory Biofuels Limited (TBF), thereby increasing its majority stake in the company.

Upon making an investment of A$1m ($908,030), Lignol will increase its holding in the company to 66% of issued and outstanding shares and 68% on fully diluted basis.

The largest biodiesel plant located in Darwin, Northern Territory was commissioned in 2008 and had an annual production capacity of 140 million liters. However, the plant was shut down due to the economic and market conditions earlier in 2009.

In 2014, TBF is keen to integrate new feedstock pre-treatment technologies and catalysts to process a range of feedstocks such as lower quality tallow, used cooking oil and palm sludge oil; a waste product from palm oil mill extraction.

Lignol Energy CEO and chairman Ross MacLachlan said that the company is delighted to raise its stake in the largest biofuel project.

This investment represents the opportunity for our company to have a substantial majority equity interest in potentially a very profitable business", MacLachlan added.

"Our goal remains to work with TBF with a view to restarting the plant in late 2013 with an appropriate project funding package in place."

The company can pay the amount over several months with first installment of A$500,000 ($454,015) payable in two parts. First tranche of A$200,000 ($181,606) has been made and the second installment of A$300,000 ($272,409) is to be paid by 15 September 2013.

"Once operational, we plan to incorporate plant upgrades to process lower cost feedstocks that should further enhance margins in 2014," MacLachlan.