Funding worth £5m has been announced by the UK Green Investment Bank (GIB) for a number of energy efficiency projects at distilleries throughout Scotland.

Aberfeldy Distillery has secured £1.2m in green funding which will go towards the installation of biomass boilers to replace the existing, inefficient, heavy fuel oil boilers. This will reduce the distilleries' energy costs and their greenhouse gas emissions. They will produce steam, necessary for several stages of the whisky production process, and will reduce the distilleries' energy costs and greenhouse gas emissions. Engineering and installation works for the project will commence immediately.

Bacardi, who own the distillery, have estimated that the project could reduce the distillery's carbon footprint by up to 90%, by replacing 100% of the heat currently generated from fuel oil.

Half of the funding for Aberfeldy is being provided by GIB, with the rest coming from the private sector. The investment is being made by the Equitix-managed fund, in which GIB is an investor, and the Equitix Energy Efficiency Fund (EEEF). The investment is in partnership with Balcas Limited, a UK manufacturer of wood pellet biomass.

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The new biomass boilers will be fuelled by sustainably sourced wood pellet fuel. The pellets are manufactured by Balcas using renewable energy and raw materials sourced from local, sustainably managed forests at their plant at Invergordon.

Rob Cormie, Group Operations Director, UK Green Investment Bank, said: "Projects like this can help distilleries to save money and reduce their greenhouse gas emissions.

"I would encourage other distilleries to install a biomass boiler or other energy saving technology – an investment to make long term savings and to help to meet the industry's ambitious green targets.

"Our 'spend to save' model means that companies don't need to find the capital up-front and can start saving money from day one."

Ernest Kidney, Managing Director of Balcas, added: "Having a secure fuel supply and reducing environmental impact are two major challenges facing distilleries and are two key benefits delivered by our integrated energy solution.

"The Vyncke biomass steam boiler at Aberfeldy distillery will be up and running by the end of 2014 and will reduce the distillery's carbon emissions by over 5000 tonnes annually, displacing all of the oil currently used onsite.

"We look forward to helping Aberfeldy distillery achieve their corporate and industry targets for reduction in fossil fuels."

Last year, Tomatin Distillery, located near Inverness, was also given £1.2m to build a new biomass boiler. The company has said it is already on target to reduce its greenhouse emissions by around 80%.

In a statement, the GIB said it expects to announce funding for a further three projects which involve distilleries in the coming months.

(JP/MH)