TAYLORVILLE - A Nebraska energy company has agreed to purchase a 50 percent interest in a $1.1 billion power plant proposed near Taylorville.

The plant eventually could create 200 jobs and burn 1.8 million tons of Illinois coal a year.

Backers said Tuesday the investment by Tenaska Inc. keeps the coal-gasification project on track for the start of construction in mid-2007.

"We think it's really a smart move for our country to offer incentives for creative ways to burn the energy we have, and coal is a big part of that," said William Braudt, general manager of project development for Tenaska. "We are really excited about building a coal-gasification project in Illinois and seeing a resurgence of Illinois coal mines.

The privately owned company, based in Omaha, operates eight power plants in six states and has helped develop a number of others nationwide. Company affiliates also market natural gas and electricity.

Specifics of the investment were not released, but the agreement includes an option for Tenaska to eventually buy the rest of the project.

The Taylorville plant could become the first in the nation to put "integrated gasification combined-cycle" technology to commercial use. Supporters say the coal-gasification technology would allow the plant to cleanly burn high-sulfur Illinois coal. The state's coal industry has been in decline for decades, partly because of tougher federal clean-air rules.

Braudt said state approval of $5 million in grants for engineering and design costs early this year was a key factor in the decision to invest in the Taylorville project.

"It says the state is actively pursuing the industry and saying we're serious about it and want to see coal-gasification plants in Illinois," he said.

The ERORA Group of Louisville, Ky. launched plans for the Taylorville Energy Center in 2003. The company has helped to finance or sell 23 coal, gas and wind-generation projects since it was founded in 1999.

A number of state and federal environmental and operating permits also are required for the plant.

ERORA Group partner David Schwartz said it was the plan from the beginning to bring in outside investors in order to begin construction of the plant in mid-2007 and to begin producing electricity in 2010.

"They are a large, capitalized company and have the wherewithal to actually go forward with construction," he said.

Taylorville Mayor Frank Mathon said he was encouraged to hear that the project continues to make progress. The plant would be about three miles northwest of the Christian County community of nearly 12,000.

"It's a fantastic opportunity for the citizens of Taylorville and the effect it will have on the livelihood of this community," Mathon said.

He added that he has not heard of any local concerns about construction of a major power plant and coal mine in the area, pointing out that coal mining has a long history in Christian County.

"They are familiar with it, and they're not afraid of it," he said of local residents. "With the (environmental) laws they have today, they're comfortable with it."