Three weeks after facing the possibility of canceling construction of its cattle-manure-powered ethanol plant, Panda Ethanol has cut a deal with its lenders to complete the Hereford, Texas, facility.

The Dallas-based company said Monday that it had secured borrowing capacity of up to $34 million from its lenders, as well as a $2.5 million investment from its parent company, Panda Energy International, to finish the 115 million gallon-per-year factory to make ethanol from corn.

Last month, Panda had warned that it might not be able to secure financing to complete the plant, which is slated to be powered by syngas generated from cattle manure, after it fired its contractor on the project, Lurgi Inc. (see Panda Ethanol Fires Plant Contractor).

Panda, a publicly traded company whose shares are traded over the counter under the ticker symbol "PDAE," had originally hoped to complete its plant by December 2007 at a cost of $269 million, but blamed Lurgi for continued construction delays. Panda now expects the plant to be finished by January 2009, the company announced.

In December, Panda Ethanol canceled plans for a 100 million gallon-per-year in Wallace, Neb., that didn't use the manure-to-syngas system that is to fuel the Hereford plant (see Another Ethanol Plant Gets Canceled). The company also is waiting for market conditions to improve before starting work on plants proposed for Yuma, Colo., Haskell, Kansas and the towns of Stratford and Muleshoe in Texas.

The delays at the Hereford plant were not related to the cattle manure-to-syngas system, but by problems with the plant's foundation and a walk-off by Lurgi, the company said last month.

Panda secured new terms for finishing its Hereford plant despite a negative market climate for corn-based ethanol makers in the United States, as rising corn and fuel costs have eroded their profit margins (see Pacific Ethanol Posts 2Q Loss and Ethanol Margins Suffer).

The economic downturn also didn't stop Sacramento-based Pacific Ethanol Inc. (NASDAQ: PEIX) from opening its newest ethanol plant in Stockton, Calif. on Friday. The new 60 million gallon-per-year plant is the company's fourth. It also owns plants in Madera, Calif., Boardman, Ore. and Burley, Idaho, and holds a 24 percent stake in an ethanol plant in Windsor, Colo., built by Front Range Energy.

Pacific Eth anol last month posted a second-quarter loss of $10.5 million, compared to a profit of $1.1 million for the same quarter a year ago, despite a 52 percent increase in ethanol sales compared to the same quarter last year.

In December, the company suspended the construction of an ethanol plant in Southern California, a month after Cascade Investment, an investment firm owned by Microsoft chairman Bill Gates, said it would sell its 21 percent stake in the company.

On the opposite coast, East Coast Ethanol said Monday that it would build a $230 million, 110 gallon-per-year corn-based ethanol plant in Chester County in South Carolina.

The Columbia, S.C-based company was formed in September 2007 by the merger of four companies – Atlantic Ethanol, LLC, Mid-Atlantic Ethanol, LLC, Florida Ethanol, LLC and Palmetto Agri-Fuels, LLC – that each planned to build one 110 million gallon-per-year ethanol plant.