£2.49m of loans will be offered up by Holyrood to help implement district heating schemes and cut fuel bills and carbon emissions.

Energy Minister Fergus Ewing made the announcement, which comes as figures show the Scottish government is on course to meet its target of 11% of heat coming from renewable sources by 2020. Figures updated by the Energy Saving Trust show in 2011 3.8% was delivered from renewable sources.

The district heating loans fund is in its second year and ten projects have already been approved for funding worth £2.1m.

To announce this year’s round of funding, Mr Ewing visited the Comrie Development Trust’s Cultybraggan District Heating project, which was awarded £190,000 under last year’s loan scheme.

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Projects which were approved under the scheme this year include local authority housing in Renfrewshire, a training college in Arbroath and a visitors and community centre on the shores of Loch Ness.

The loans are part of a scheme open to local authorities, housing associations, small to medium sized enterprises and energy service companies.

Energy Minister Fergus Ewing said:"The high start up costs involved can mean schemes fail to get off the ground because commercial finance isn’t available. By offering these loans, we are helping communities to help themselves, developing affordable, green and locally produced heat."

Alan Caldwell of Comrie Development Trust said: "This project illustrates perfectly the Trust's commitment to a low carbon future, helping us to attract businesses, create jobs and bring wider benefits to our community through our development of the land at Cultybraggan Camp. The availability of this type of loan finance makes such investments achievable."

(IT/GK)