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The Perth-based group placed 41.5 million shares at 30c each with clients of Shaw Stockbroking to raise the funds, subject to shareholder approval at a meeting scheduled for next month.
The company has allocated $9.3 million of the capital for the Swan Hill project, which will be the first purpose-built grain fuel ethanol facility developed in Australia.
The 100 million litres a year project is planned to convert more than 300,000 tonnes of cereal grains – corn, barley, wheat and sorghum – to fuel ethanol and high protein starch feed co-product.
The fuel ethanol is planned to be sold into the Australian liquid transport industry and marketed as a blend with petrol.
Australian Ethanol chairman and CEO Peter Anderton predicted the Swan Hill project would be seen in the future as one of the most important steps for the development of a domestic fuel ethanol industry.
"[It] will go a long way to kick-starting the Australian ethanol industry and to bridge the expanding void between the Australian ethanol industry and the enormous progress to date on the international front," Anderton said.
Australian Ethanol has also committed $2 million to complete the initial payment for the acquisition of Beatrice Biodiesel in the United States and to undertake process and detailed engineering for the project.
Funds will be committed to land acquisition, and utility and infrastructure construction at Beatrice.
According to the company, the Beatrice Biodiesel Project is the largest capacity facility to be announced in the US and is scheduled for full production in the last quarter of calendar 2007.
The facility will produce 190 million litres a year of B100 biodiesel for sale into the US diesel market.
The project will use soya oil feedstock using second-generation solid catalyst technology, which Australian Ethanol said guarantees specifications to US and European fuel standards.
Soya supply and biodiesel offtake contracts for the total requirements and production are currently being finalised.
Australian Ethanol said it plans to raise the remainder of the funds required for Swan Hill and Beatrice over the next three to six months.
Australian Ethanol shares were 7.5c higher at 48.5c in midday trade.
