A potential investor in a wood-fired power plant in West Enfield has withdrawn its request to have the state guarantee a $5 million loan amid allegations that the plant’s owner owes hundreds of thousands of dollars in unpaid bills and taxes.

The action is a setback for Stored Solar LLC, which has been trying to make its mostly idle plant profitable by locating a shrimp farm and greenhouses on the property, part of an innovative vision of how to revive Maine’s struggling forest-products industry. But those plans are burdened by allegations that Stored Solar owes an estimated $500,000 to wood suppliers and contractors, and has failed to pay last year’s $90,000 tax bill in Jonesboro, where it owns a second power plant that has rarely operated this year.

Now the abrupt pullback of a potential investor creates more uncertainty. It comes a week before Gov. Paul LePage and six state officials are set to go to San Francisco for a major bioeconomy conference where LePage will give an opening address about the economic opportunities in Maine for biomass-related industries.

The Finance Authority of Maine had received an application from Boston-based Arctaris Royalty Ventures Co-Investment LP, a fund that targets economically depressed areas, to guarantee 90 percent of a maximum $5 million loan to Stored Solar for improvements at the West Enfield plant. But that loan guarantee request has been taken off the finance authority’s Oct. 19 meeting agenda.

Authority spokesman Bill Norbert said Tuesday that the lender made the request and asked the agency to keep the reason confidential.

Jonathan Tower, a general partner at Arctaris, declined to comment on why the company rescinded its loan guarantee request.

In general, though, lenders look at a company’s financial performance and debt history as part of the due diligence process of assessing a borrower’s ability to repay loans.

SWITCHING TO BIOMASS CHALLENGING

In an email Wednesday to the Portland Press Herald, Kimberly Samaha, chief executive officer at Synthesis Venture Fund Partners, an entity allied with Stored Solar, acknowledged the challenges of turning around the biomass plants.

“Since bringing the power plants back on line in January,” she wrote, “we have experienced many challenges on basically every level. We have continued to progress in our ultimate goal of making these plants profitable.”

She also lamented “negative press” that portrays Maine as being unfriendly to business and makes it harder to attract investors.

Another financing option is in the final stage of due diligence at the Maine Rural Development Authority, which has conditionally approved a $500,000 state-backed loan for Katahdin Shrimp Farm LLC, solely owned by Stored Solar West Enfield LLC. The goal is to help make the biomass plant profitable by building a shrimp farm on the property, warming the water with heat from the plant that is currently being wasted.

That loan hasn’t become final, and Doug Ray, a spokesman for the development authority, said Tuesday that he wasn’t aware of a potential closing date. Asked if the development at the finance authority would have an impact on approving the loan, Ray said the development authority board hadn’t met to discuss the situation.

The $500,000 loan is for the design, engineering and construction of three shrimp farm buildings next to the power plant in West Enfield, located about 40 miles north of Bangor in Penobscot County. The five-year loan has a 4 percent interest rate and would be secured by real estate and other business assets, as well as a guarantee of a related company, Capergy US LLC. Capergy’s chief executive, Fahim Samaha, is a partner in Stored Solar and is listed on the Maine Rural Development Authority loan as a principal in Katahdin Shrimp Farm, according to the finance authority. He also is the husband of Kimberly Samaha, the CEO at Synthesis Venture Fund Partners.

The rural development authority was created by the Legislature to provide financial assistance to communities and their development partners, with a focus on rural, economically distressed parts of the state. It helps develop speculative and underused commercial and industrial properties and is overseen by a board that includes the finance authority and the state Department of Economic and Community Development.

BROAD VISION FOR FORMER MILLS

The shrimp farm, as well as plans for greenhouses, are part of a broad vision by Stored Solar and its principals to use former paper mill sites to jump-start a bioeconomy producing fuel, food and other products made from wood. The company has proposed a $240 million biorefinery for a mill site in East Millinocket, but the project has been halted by a legal dispute and failure to secure a federal loan.

Most recently, the vision has evolved with new plans summarized in Born Global Bioeconomy 2050, an initiative that centers on transitions involving waste, energy and food. An online presentation about the concept includes catch phrases such as “Be the Innovation. Be the Change,” and touts the “Power of Clustering Circles.” They include an Energy Park at West Enfield with two 30-acre greenhouses holding tomatoes and peppers, and the shrimp farm.

A separate, confidential presentation viewed by the Press Herald estimates that each of the three modules at the shrimp farm would produce 10,000 pounds a year, cost $175,000 to build and generate $150,000 a year in gross revenue.

If the farms are built, they would be the first such operations linked to a biomass power plant in the United States, according to the Biomass Power Association, a trade group.

More details about the wider vision also could emerge at the conference in San Francisco next week.

Kimberly Samaha, who’s also chief executive officer at Born Global, is scheduled to deliver a presentation there. At the spring session of the Advanced Bioeconomy Leadership Conference held in Washington, D.C., in March, she released the names of 11 companies that had pre-qualified to participate in potential Born Global ventures in Maine.

Financial problems and setbacks are part of the landscape in the emerging bioeconomy, said Jim Lane, editor and publisher of Biofuels Digest. Lane, who writes about biotechnology and is a co-founder of the 7-year-old conference, said his goal is to give companies and experts in the field a forum to network and present their work among peers.

“A failure by one company or one set of owners doesn’t mean that everything they touch will turn to mud,” Lane said. “Conversely, a project that doesn’t merit investment shouldn’t go forward. If it fails, it’s bad for everybody.”

Lane has written about Born Global and promising Maine biotech developments, but said he wasn’t aware of Stored Solar’s financial problems. He noted, however, that one element of the conference includes a “wolf pack” format, in which experts ask follow-up questions of the presenters. The evolving news coverage of Stored Solar may provide background for reaction to Samaha’s presentation.

Lane said: “The guidance we give the wolves is, if you think the technology is viable, say a few words about why. If you think they are missing information, try to get at it. We don’t give them a list of questions. They can ask what they want.”

LePage will address the conference on Oct. 18, “making an announcement about the latest activities in the state of Maine for the bioeconomy,” according to the schedule for the Advanced Bioeconomy Leadership Conference.

“The governor will speak to the full audience of potential investors, with a goal of attracting investment to Maine,” said Julie Rabinowitz, his press secretary.

CONVERTING TIMBER, WOOD WASTE

The LePage administration sees biotechnology as one answer to repurposing the five paper mills in the state that have closed in the past few years, and making up for other forest industry cutbacks that have erased an estimated 2,400 jobs since 2011. Early stage companies and researchers are developing ways to convert timber and wood waste into fuels, foods and chemicals, which could be produced on a commercial scale at languishing mill and biomass power sites.

Among the entourage of state officials joining LePage are Rosaire Pelletier, senior forest products adviser; George Gervais, commissioner of the Department of Economic and Community Development, and John Endicott, the department’s director of business development; Brian Whitney, president of the Maine Technology Institute; Aaron Chadbourne, the governor’s policy adviser; and Steve McGrath, director of the governor’s energy office.

Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

Twitter: TuxTurkel

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