The Carbon Trust has announced it is to increase its loans to individual companies and boost its overall loan fund to help small and medium companies save energy and money.

The organisation has doubled the maximum size of its interest-free Energy Efficiency loans from £100,000 to £200,000 and increased the overall loan amount available this year by 45 per cent to £31m.

The Carbon Trust said the move was in response to difficult market conditions and that it would enable small businesses to implement energy-saving projects on a more ambitious scale than previously possible. It claimed the new scheme would generate 20 per cent more carbon and energy savings this year than would have been possible under the previous limit.

Hugh Jones, solutions director at the Carbon Trust, said: ‘In the current economic climate, the tighter credit conditions are making it harder for small businesses to find alternative sources of funding.

‘We know that some companies found that the £100,000 limit made it hard for them to finance the more ambitious projects they wanted to invest in, such as large lighting installations, boiler projects, or multiple equipment purchases such as variable speed drives with compressors and heat-recovery equipment.

‘£200,000 loans pave the way for companies to take on such projects and significantly reduce both their carbon emissions and their energy bills, which in turn will enable them to reduce operational costs and become more competitive.’