The Innovative Clean Energy Fund — the same government program that funded Aboriginal Cogeneration Corporation's gasification proposal — has granted $1 million to a "bio-coal" production plant in Kamloops.

Nations Energy Corporation, a Vancouver company, will use the funds to build a commercial-scale plant to convert mountain pine beetle wood into clean-burning biomass.

Using a process known as torrefaction — a thermochemical process — and densification, the wood is made more energy dense. The product, fuel pellets, can be used at power stations and in boilers and cement kilns as an alternative to coal.

Nations Energy Corporation could not be reached for comment Monday.

The company's website indicates it has a secure fibre supply in the Kamloops Timber Supply Area and plans to construct bio-coal facilities and produce bio-chemicals.

Kevin Ainsworth, a former vice-president of Ainsworth Lumber, and Dale Andrews, founder of First Wave Capital, are listed respectively as CEO and CFO.

Mike LeBourdais, chief of the Pellt'iq't First Nation (Whispering Pines/Clinton) is also listed as managing director, but LeBourdais said Monday that the biofuel proposal he's been working on for several years is not affiliated with Nations Energy Corporation.

"It would have been nice to get a million bucks," he said.

LeBourdais said there was a partnership with NEC contemplated last year but the business deal never came to pass. He continues to concentrate on another biomass project also based on mountain pine beetle timber.

The funding is part of a $9-million investment by the Innovative Clean Energy Fund in 13 clean energy projects in B.C.

The fund granted $1.5 million to a rail-tie gasifier plant that was proposed for a Mission Flats site by Aboriginal Cogeneration Corporation in 2009. ACC withdrew its proposal after it sparked environmental and health concerns in the community.

NEC's website pledges "a land stewardship ethic that addresses reforestation and the conservation of soil, air, and water quality, biological diversity, wildlife and aquatic habitat, recreation and esthetics."