First 1.5 MW plant is back on because of a power purchase agreement with PTC India offering a higher tariff rate.

Clenergen’s Chennai, India-based subsidiary said today it closed terms to acquire a 1.5 megawatt biomass power plant in Namakkal, Tamil Nadu.

The plant, recognized as one of India’s national demonstration projects, is expected to be operational before the end of the year. The plant was stopped in 2007 because of operational cash flow constraints and its failure to remain profitable at a low tariff rate.

But with a power purchase agreement between PTC India and the subsidiary, Clenergen India, a higher tariff rate has now been reached. PTC India is a government initiated public-private partnership that provides power trading arrangements.

Florida-based parent company Clenergen (OTCBB:CRGE) develops clean energy generation projects. It also installs and operates distributed power systems and applies its plant science to cultivate biomass feedstocks.

The carbon neutral Namakkal plant is expected to generate net revenue of about $1 million during its first year of operation, ramping up to 10 MW during its first phase. Its anaerobic digestive technology has been proven to process agri-biomass into renewable energy, Clenergen said.

Clenergen is also planning to install two new biomass power projects—a 16 MW plant in Tuticorin, Tamil Nadu, and a 64 MW plant in Karnataka. The Tuticorin plant is expected to be operating by the end of 2010.

The total projected cost of the new plants is $236 million. Clenergen is looking to raise $83 million in equity financing on the Indian stock markets to help fund them.

The Tamil Nadu and Karnataka plants are expected to use feedstocks from a grass species called beema bamboo and a tree species marjestica.

Clenergen uses what it claims is an efficient power generation system using gasification technology/gas turbines generators and power generation through pyrolisis/steam turbine generators.