Communities and rural businesses all over Scotland can now apply to a £23.5 million government loan scheme to help them get community energy renewable projects up to the planning stage.

The scheme is designed to make sure communities all over Scotland receive the maximum benefit possible from the projects it funds.

Energy Minister Fergus Ewing declared the scheme open in a speech to the Scottish Highland Renewable Energy Conference in Inverness. Communities and rural businesses all over Scotland have already benefited from the loans, which are designed to help small-scale projects which directly benefit their local area, and which would not proceed without the loan.

Projects all over Scotland have already received more than £4.5 million in loans, including a Borders housing association which will use the proceeds to improve the houses it offers for rent, and a Highland charity which will become more financially sustainable thanks to a hydro scheme.

The Community and Renewable Energy Loan Scheme (CARES) is designed to support projects before they reach planning as this stage is considered too high risk for commercial loans.

Individual projects can receive loans of up to £150,000 to cover 95 per cent of agreed costs. Free local advice and support is also available.

Priority is given to projects which give the highest value of benefit to their local communities.

The scheme is open to community organisations, rural businesses and joint ventures between the two.

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Alongside the scheme, Energy Minster Fergus Ewing updated on progress towards the community and locally owed target and launched the Community Benefit Register, designed to help communities all over Scotland maximise the rewards they receive from renewable energy developments, and a database of all community-owned energy resources in Scotland.

Energy Minster Fergus Ewing said: "The Scottish Government is determined to ensure communities all over Scotland reap the benefit from renewable energy. We have set a target of 500 MW of community and locally owned renewable energy projects by 2020, which could be worth up to £2.4 billion to Scottish communities and rural businesses over the lifetime of those projects.

"I am delighted to announce today that we are making significant progress towards that target. The work done by the Energy Saving Trust to produce a database found as at the end of June 2011, some 147MW of capacity is operational in Scotland. This represents nearly 30 pe cent of our 2020 target.

"The CARES scheme empowers communities all over Scotland to capitalise on our Green Energy Revolution by developing their own community energy. They will in turn be able to take the profits from the schemes and plough them back into their own communities. Rural businesses who benefit from the scheme must commit to sharing their profits with local communities. All profits from the community-run schemes will remain with the communities, and all the schemes run by local businesses have committed to give a minimum of £10,000 per MW per annum to the local communities, ensuring the benefits of Scotland’s natural resources are shared with everyone, as well as the jobs and opportunities the schemes will create."

Previous recipients of CARES loans include Barra and Vatersay Wind Energy Limited (BVWE), which is planning to erect a single wind turbine on a site at Gob Sgurabhal, the most northerly point on Barra. The community has now secured a number of their consents and are currently focused on finalising the turbine access route and progressing the proposal to financial close. It is hoped the group will be in a position to install their turbine by the end of the summer of 2012.

Barra & Vatersay Wind Energy’s Project Manager, Euan Scott said: "Securing a source of income is the very reason that community groups need to progress these projects but at the same time the lack of initial investment capital was acting as a barrier.

"The CARES Loan Fund overcomes this hurdle by effectively providing a bridging-loan; enabling projects to progress to a stage at which the financial, technical and legal matters relating to the project have been addressed in sufficient detail for them to be able to access private finance. Without the CARES Loan Fund the community wind turbine project in Barra would not have progressed."

(GK)