FOUR geothermal companies have had to give up multimillion-dollar grants from the government to help pay for project drilling because they have been unable to attract matching funds from private investors.

The failure of the companies to attract private funds has prompted the Labor government to close its drilling grants scheme and put the unused money into a $126 million emerging renewable energy program launched by the Energy Minister, Martin Ferguson, yesterday.

Struggling ... geothermal companies have been unable to attract interest from private investors. Credit:Alex Ellinghausen

The geothermal drilling program offered companies $7 million grants to help test hot rock temperatures, up to five kilometres underground.

In a statement to the stock exchange yesterday, Green Rock Energy, Greenearth Energy, Hot Rock Ltd and Torrens Energy said tough market conditions and the design of the grants had contributed to their failure to attract matching finance.