Scotland business

Alex Salmond launches £103m renewable energy fund

Pelamis wave power device. Pic: Pelamis
Image caption The fund will initially focus on wave and tidal energy as well as renewable district heating

First Minister Alex Salmond has launched a £103m fund for Scottish renewable energy projects.

The Renewable Energy Investment Fund (REIF) aims to attract more private investment to the sector.

Its priorities include wave and tidal energy, and renewable district heating.

Mr Salmond also announced plans to set up an advisory group to support those seeking finance from the new UK Green Investment Bank and £4.3m funding for SSE's offshore turbine test facility.

He said the Scottish government would invest the cash in the firm's Hunterston offshore wind turbine test facility.

'Good ideas'

The first minister said: "This fund will help leverage further significant private finance into key areas of the renewables sector where specific funding gaps have been identified.

"The planned advisory group will provide expert advice for people who have good ideas and projects to put to the Green Investment Bank, but who need a helping hand to make them ready for investment.

"The group will help those people to refine and pitch their proposals - by doing so, it should enable the Green Investment Bank to make decisions quickly, and to start investing in projects which will deliver real benefits."

The REIF has been set up following a deal between the UK Treasury and the Scottish government over the release of funds from the fossil fuel levy.

The levy was introduced in Scotland in 1996 in order to raise money from traditional energy sources to invest in renewable power.

'Vital catalyst'

The new fund aims to complement existing public and private sector finance schemes available in Scotland, providing loan guarantees and equity finance alongside co-investment partners.

REIF will be delivered by the Scottish Investment Bank on behalf of the Scottish government and its enterprise agencies, with the first deals expected to be completed by the end of the financial year.

Niall Stuart, chief executive of trade body Scottish Renewables, said: "This £103m fund will inject much-needed investment into the development of the next generation of renewable technologies, such as marine energy and renewable heat.

"This kind of support can be a vital catalyst in attracting even greater levels of private investment."

He added: "Scotland is already at the forefront of developing and testing emerging wave and tidal technologies and, with the correct level of government support, we can become a global centre of excellence in both the deployment of these technologies and their accompanying supply chains."

A UK government spokesman said: "In November last year, the chancellor and chief secretary announced the £103 million of additional funding to be made available to the Scottish Government to support development of renewable energy in Scotland, through the Fossil Fuel Levy fund.

"This has huge potential to create jobs and drive growth, and we are pleased that the funding is being used as announced at the time.

"The remaining £100m from the fund has been made available to support the capitalisation of the £3bn UK Green Investment Bank, based in Edinburgh."

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