The London Waste and Recycling Board (LWARB) is to take control of the East London Sustainable Energy Facility (ELSEF) after the project failed to meet its targets.
Biossence (East London) Ltd (BEL) was initially offered a £4.5m development loan by LWARB to develop ELSEF, but of this only £3.6m was drawn down.
Construction on the £80m project began in February 2011, at a launch attended by London mayor Boris Johnson. The site has a planning consent to process up to 130,000 tonnes of solid recovered fuel a year.
Accountancy firm Milsted Langdon has now been appointed to “ensure the future” of the project.
LWARB said the project stalled “late last year” when BEL’s investors concluded that they were unable to meet their own targets and told LWARB they wanted to withdraw.
A spokesperson said: “Since then, work has been done to identify how the project can be shaped to attract new investors.
“Now, in order to move this forward, the project has been put into administration and the administrators role is to look at the best way to move the project forward in its current form, with the involvement of new investors, or whether it would be more beneficial to sell the site to an alternative buyer.”
It said the project had stalled late last year after BEL’s investors said the project would not meet its targets.
A BEL company insider told MRW the move would allow the project to continue on a firmer financial footing.
Simon Rowe, one of the Milsted Langdon administrators, said: “LWARB assumed control of the project and is keen to see it achieve its original objective, which is to process a waste derived fuel and produce renewable energy.”