A distillery near Inverness has become the first Scotland-based business to secure investment from the UK Green Investment Bank (GIB).

Tomatin Distillery received £1.2m in funding to build a new biomass boiler at its site.

Around half of the grant will come from the Equitix managed fund, Energy Saving Investments (ESI), in which the UK Green Investment Bank (GIB) is a cornerstone investor.

The remaining £600,274 will be provided by the Equitix Energy Efficiency Fund (EEEF).

The investment is being made by ESI in partnership with Balcas Limited, a leading UK manufacturer of wood pellet biomass.

The ESI fund forms part of GIB's allocation of investment into one of its priority sectors, energy efficiency.

The boiler installation at Tomatin Distillery, located 16 miles south of Inverness, produces steam utilised in the production of whisky. The new boiler will replace a high maintenance, inefficient oil-fired boiler. It will also replace 80% of the heat load usually generated by the current boiler.

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It will be fuelled by sustainably sourced wood pellet fuel and as a result, CO2 emissions are expected to be cut by more than 96,500 tonnes over the 20-year investment period. In addition to supporting the green economy and reducing carbon emissions, switching to a biomass boiler will save Tomatin a significant amount on their energy bills.

Shaun Kingsbury, UK Green Investment Bank chief executive officer said: "I am pleased to be able to announce our first Scottish investment. As well as significant emission reductions, the project will provide a boost to the local economy. We have a strong pipeline of investments in Scotland and hope to be able to announce further investments in Scottish distilleries, as well as other projects, very soon.

Secretary of State for Scotland Michael Moore added: "The first Scottish deal is a landmark moment for this ground-breaking Edinburgh-headquartered institution. It demonstrates that combining Scotland's expertise in the financial and green sectors with a strong transaction team in London, can deliver significant benefits for businesses and local communities across Scotland.

"With the Bank confident that more Scottish investments will be announced in the near future, I am certain that UKGIB will play a hugely important role in realising Scotland's enormous green energy potential, ensuring that we are at the centre of the UK's low carbon economy."

Established in 1897, the Tomatin Distillery produces a range of single malts and blended whiskies.

(JP/CD)