To invest in a company that has been able to raise only $1 million when it needs $3.6m to fund the next stage of its business is pretty irrational.

When that company has fallen out with a key business partner and failed to find anybody else to come to the party, it seems crazy to even think of putting money into it.

To add to the uncertainty, the company is being run by a managing director/executive chairman who has only been in the job a matter of months, and the enterprise is almost entirely based on patented new technology that has still pass its first commercial-scale test.

The company is Environmental Clean Technologies (ASX code ESI), and its great white hope is a process for turning brown coal into the black variety.

Its “coldry” technology dries the poor quality brown coal and produces pellets which, when burnt in power stations, are said to generate electricity at least as efficiently as black coal, but with lower carbon dioxide emissions.

A test burn of the product is to be carried out later this year or early next by the coal giant China Datang.

In the meantime, ESI has patched up misunderstandings and restored a partnership agreement with Vietnamese construction, engineering and real estate group, TinCom.

Although the details of the new arrangement are not clear, it is the continuing interest by the two big groups, TinCom and Datang, that has attracted the Punter.

TinCom and ESI plan to build a coldry production plant beside the Loy Yang power station in Victoria’s LaTrobe Valley, with an initial output of two million tonnes a year, with commissioning planned for 2014.

Alas, the recent rights issue to raise $3.6m, most of which will be needed for the design-for-tender for the plant, has raised only $1m.

The first phase of design is likely to go ahead, but serious cash will be needed soon.

In the wild hope that the lack of cash is merely a temporary setback, the Punter has invested a cautious $820 in 200,000 ESI 2014 options (ESIO), exercisable at two cents each.

The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.