LIHUE, KAUAI, HI --- A new agreement between Pacific West Energy LLC and Kauai Island Utility Coop (KIUC) is expected to help advance plans for a sugar ethanol plant on the island of Kauai, the Honolulu Advertiser reported.

Pacific West hopes to retrofit Gay & Robinson's Kaumakani sugar mill to produce 15 million gallons of ethanol each year. In addition, the company plans to produce 30 megawatts of power by burning bagasse.

But raising financing for the $125 million project has been challenging. Pacific West Energy CEO William Maloney said a collaborative relationship with KIUC could improve the project's prospects, the Advertiser reported.

In September 2008, Gay & Robinson withdrew as active partners in the project. However, the company remains interested in leasing its Kaumakani sugar plant to Pacific West Energy. Gay & Robinson has decided to leave the sugar business within the next couple of years.

In addition to securing the required financing, PacWest needs access to 12,000 to 15,000 acres of land for growing sugar.