Cougar has entered into a memorandum of understanding with Direct Investment of Singapore to raise the money.

The funds will be raised in two tranches, the first for $30 million at the end of 2008 and the second for $250 million at the end of 2009.

The funds will be used for a bankable feasibility, design and construction of the first stage of Cougar’s underground coal gasification project, which is part of the phased development of a 400MW power station using UCG gas as the fuel.

The UCG process enables deep coal deposits to be converted into a syngas suitable for use as a fuel in power generation or the manufacture of petro-chemical products.

“The company is now placing orders for the plant required for the pilot burn and associated pilot gas clean-up equipment, and is also planning a new drilling campaign to extend the JORC resource base," Cougar managing director Len Walker said.

“The funding for this work comes from the recent capital raising and the progressive exercise of the December 2008 options.

“Project planning and financial evaluation for the first stage of the power project will also be accelerated in anticipation of the finalisation of the agreed project financing plan.”