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Grants and loans for green projects

Grants and loans for green projects

With the low carbon economy gaining significant traction, now is a fantastic time for businesses to invest in cleaner technologies and promote environmentally-friendly practice. Grants are available from many areas, including local and national Governments, the EU, and energy efficiency organisations dedicated to reducing energy use.

What are green loans and grants?

Green loans and grants provide finance to companies pursuing environmentally-friendly projects or objectives, typically with more attractive terms than those provided from commercial lenders. Grants do not have to be repaid, and often come with quite strict restrictions such as how the finance must be used and when it must be used by. Loans must be repaid but are less restrictive. Green loans and grants are most often available to start-ups and small businesses, although there are a few available to larger businesses.

How can I find what green loans and grants are available?

Many of the most popular green loans and grants are provided by Local Authorities to businesses operating in their geographical catchment area. Therefore it’s often best to contact your Local Authority in the first instance to see what’s available. Alternatively, there are a number of schemes run by the Government and the European Union which provide finance for green projects. The Department of Energy and Climate Change (DECC) and the Department for Environmental, Food and Rural Affairs (DEFRA) are both involved in grant provisions. NGOs like The Carbon Trust also provide support to SMEs and start-ups.

Bio-energy Capital Grants Scheme

The Bio-energy Capital Grants Scheme is run by the Department of Energy and Climate Change (DECC) and supports biomass-fuelled heat, and combined heat and power projects in English industrial, community and commercial sectors. The scheme is offered as part of the UK Environmental Transformation Fund which encourages understanding of lower-carbon technologies amongst individuals and businesses.

Energy Technologies Institute (ETI)

The Energy Technologies Institute (ETI) is a major consortium of public and private sector interests with major representation from Government departments and multinationals such as Shell and EDF Energy. It provides funding to high-potential innovative low-carbon technologies with a range of industrial applications

DEFRA Research Funding

The Department for Environment, Food and Rural Affairs is encouraging green research through a number of funding opportunities including competitions. These are run throughout the year and are available to both individual business and consortiums. The Small Business Research Initiative, through the Department of Business, Innovation and Skills (BIS) is specifically aimed at increasing SME access to Government contracts.

Enhanced Capital Alliance (ECA)

The Enhanced Capital Alliance (ECA) is a Government-sponsored scheme to help manage climate change, providing businesses with enhanced tax relief for investments in equipment that meet published energy-saving criteria. In the first-year, the full cost of investments can be written off against the taxable profits of the period in which the investment is made. The scheme covers a broad range of products including lighting, heat pumps and boiler equipment.

Competitiveness and Innovation Framework Programmes (CIP)

CIP is an EU initiative targeting small businesses that supports and promotes innovation to increase the competitiveness of EU firms in the worldwide market. It specifically aims to promote eco-innovation, particularly the increased use of renewable energies and energy efficiency. This is achieved through improving access to finance for green projects and connecting environmentally friendly companies in order to pool resources and share best practice schemes.


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