Enerkem Inc. (NKM), a closely held Canadian biofuel company, sold a stake in an ethanol plant it’s building in Alberta to Waste Management Inc. (WM) and EB Investments ULC for C$37 million ($37.5 million).

The total cost of the plant is expected to be about C$100 million, Marie-Hélène Labrie, a spokeswoman for Montreal-based Enerkem, said today in an e-mail. The project in Edmonton is also funded by C$23.4 million in government grants and will convert garbage into about 10 million gallons of ethanol a year.

The facility will initially produce methanol, which will be sold to Methanex Corp. (MX), until ethanol production begins in 2014, Labrie said. EB Investments and Waste Management each invested C$7.5 million in the project in December 2011.

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Jasmina Kelemen at jkelemen2@bloomberg.net