CADIZ - Partial funding of a wastewater-to-biodiesel plant in the village is one step closer to being a reality.

Harrison County Engineer Rob Sterling on Wednesday asked commissioners to seek and enter into a $2.9 million water pollution control loan fund agreement for the county. The pact would be for the planning, design and/or construction of a wastewater facility. He said the board must pass the resolution for application of a loan and also designate a dedicated repayment source for the loan. He also asked to be permitted to advertise for bids for the construction of the facility.

Sterling told leaders the "forgivable loan" would be received through the fund.

"We have to apply as a loan, but then they will forgive the principle on that," he said. "You have to designate how you would pay it back, but once the funding is turned over to you it would be a forgiven loan."

The board approved the request and noted the dedicated source of repayment would be the sewer enterprise fund.

The project has been estimated at $6 million, and leaders are seeking an additional $3 million from the Ohio Water Development Authority, according to officials, for the plant which will alleviate sewer issues within the village.

The 70-year-old system currently violates the discharge permits set forth by the Ohio Environmental Protection Agency. The new system will allow the village to pump two of its three sewage lines to the facility.

A first-of-its-kind facility would divert about two-thirds of the village's wastewater flow to a new aerobic treatment plant, according to officials In turn, the treated wastewater will be used to grow algae in a series of environmentally controlled ponds. The algae then will be processed to extract a type of oil that has many of the characteristics of diesel fuel.

Sterling said the fuel grade oil will be extracted from the algae and the local government will utilize the fuel for transportation needs.

In addition, the remainder of the diesel fuel could provide a source of revenue to cover the cost of operation, he noted.

He said he believes the fuel could be produced for about $1.41 per gallon and could receive a $1 per gallon credit.

"We could be making money off the final product," he said.

The new aerated lagoon-type wastewater treatment plant would be located at the former Consolidation Coal Co. preparation plant site south of Cadiz. Two wastewater-pumping stations are to be installed along Oak Park and Country Club Road.

The stations will divert the supply from two of the village's three main wastewater lines and transport approximately 65 percent of the total from Cadiz's antiquated system.

Algae from that process will be kept in 18-inch deep ponds that will cover 10 acres, officials said. The ponds are expected to produce 18,000 gallons of diesel fuel per acre.

Sterling earlier said the idea for the plant started approximately three years ago from talks with an engineer at Ohio University who developed the concept. Sterling has said experts nationwide would be involved to make the facility's design more environmentally sound.

A transparent cover system for the ponds is being discussed with a company in Connecticut. In addition, he said plans call for an insulator for the ponds for heat.

According to Sterling the project was ranked second among some 1,600 recommended applications for stimulus funding statewide. However, the U.S. EPA must approve the state's plans before funding could be awarded.