A biofuel energy developer has so far failed to post the letter of credit (L/C) required if it fails to start production at a barley protein meal power plant in the US state of Virginia.

Osage Bio Energy's failure to post an appropriate L/C has added to uncertainty over the future over the plant, which was completed and should have started production a year ago.

L/C concerns

Even city officials are uncertain when production of ethanol will begin at the Appomattox Bio Energy plant in Hopewell.

They are also concerned that they will lose anticipated tax revenues, and so far the developers have not posted an L/C to guarantee anticipated payments of taxes that Osage Bio Energy's activities should generate for the city.

According to a city official, its contract with Osage specifies that the company has agreed to either start production or post a US$5 million L/C before 30 September 2011.

Assurances

The company has assured Hopewell Mayor Christina Luman-Bailey that production will begin but has not provided a definitive date for this.

The developers have also reportedly told her that they are awaiting deliveries of barley after the harvest at the end of May.

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