KEDCO, a Cork-based energy company, has raised €3.2m from investors to fund an electricity plant in Newry.

The company said the cash was raised through the issue of loan notes to new and existing investors.

The notes being issued will be bought back in two years or earlier if the company is sold, Kedco said.

"The money will be used to develop and progress previously identified joint venture opportunities in power generation from waste and for working-capital purposes. We look forward to updating the market as to the progress of future fundraising," chief executive Donal Buckley said.

Kedco reported a first-half loss of €1.5m, down from almost €3m year-on-year, on sales of €4.2m, which rose 28%.

The company, which is listed on London's Alternative Investment Market, uses wood, agricultural and food waste for fuel in its electricity plants.

Kedco has so far invested about €6m in the Newry project, which will generate 4MW of electricity.

The company's shares have fallen by 50% so far this year, cutting Kedco's value to €21.4m.