MADISON — Belfast-based GO Lab announced Thursday it has secured the $85 million in financing needed to begin construction of a manufacturing operation at the former Madison Paper Industries mill.

Cianbro construction of Pittsfield will move forward with installing three manufacturing lines that will be used to make three types of wood-fiber insulation that GO Lab refers to as TimberHP.

“Everyone has worked extremely hard over the past few years to ensure that we would have the significant, up-front capital needed to turn a paper mill into the first wood-fiber insulation manufacturing plant in North America,” Josh Henry, co-founder and president of GO Lab, said in a statement.

GO Lab will employ 120 people at the Madison mill, with more jobs expected to be created by the end of 2022, company officials said in the statement announcing the financing.

The building products manufacturer closed on the Madison mill in 2019 in a $1.9 million deal.

The announcement marks the beginning of a new chapter for the town after losing Madison Paper Industries when it shuttered in May 2016. The closure was a blow to the town’s tax base, and officials spent years in court battling over the valuation of the property, nestled between Main Street and the Kennebec River. Madison Paper had argued that it was due a tax refund because the mill was assessed at more than it was worth. Maine’s highest court sided with the town in July over Madison Paper.

But rather than recall that past, officials Thursday were looking at the boon the new plant is expected to be for the town.

“This is a big deal, it’s been about two and a half years that GO Lab has been raising funds to get this project started,” Town Manager Tim Curtis said. “We’ve done what we could with small grants. ($85 million) is what it takes to revitalize an industrial base and that’s what (GO Lab) and what we were waiting to get past.”

People passing the mill in the coming weeks will see heavy equipment as work is conducted both inside and outside the expansive property.

“There’s work being done and heavy equipment being used to get (the facility) ready to accept equipment,” Curtis said. “With equipment comes jobs and with jobs comes revitalization. Madison Paper was a great 40-year run for the town of Madison. As far as an employer and as part of our tax base, they were always a good public partner.”

The complete cost of the GO Lab project is about $110 million. TimberHP is a wood-fiber insulation meant for the residential and light commercial construction markets. The insulation has been produced in Europe for more than two decades and accounts for over $700 million in annual sales across the European Union, according to the GO Lab website.

The $85 million was secured through bonds issued by the Finance Authority of Maine. The notes were sold to 14 institutional investors that handle large municipal bond funds, the company release said. The plan is to begin producing TimberHP loose fill insulation in the first quarter of 2023, followed by wood fiber products in the second and third quarters.

“GO Lab is forging a new and innovative path forward for Maine, expanding our forest products industry in exciting ways that will revitalize manufacturing, provide good-paying jobs in rural communities, and strengthen our economy,” Gov. Janet Mills said in the GO Lab statement released Thursday.

Financial agreements between Madison and GO Lab include a $400,000 loan and three grants totaling $1.65 million. The loan was acquired in 2019 when the town received $300,000 in funding to loan GO Lab for engineering costs; the town pitched in an additional $100,000.

“It’s a great public-private partnership in the redevelopment of an industrial base,” Curtis said. “Now that the financing is in place, we are poised for forest products manufacturing to begin once again in Madison.”