RBS starts £200m fund to boost green energy

Royal Bank of Scotland hopes to do its bit for the environment by launching a £200m Carbon Reduction Fund to help businesses reduce energy costs.

It plans to finance a range of sustainable energy projects from retro-fitting buildings with more energy efficient heating and lighting to on-site wind power and ground source heat pumps. The fund is backed by Funding for Lending, so RBS will be able to lend at lower rates.

RBS's corporate and institutional banking division is running the fund and will lend to businesses with a turnover of more than £25m.

Chris Sullivan, chief executive of RBS Corporate bank, said: "Businesses of all shapes and sizes can make significant savings from being more efficient as energy costs continue to rise. We hope to offer businesses both an incentive and a solution to transforming their energy use and carbon footprint."

RBS said it was the biggest lender to UK renewable projects last year and has embarked on a number of energy efficiency measures within its own business.

The Climate Change Act 2008 aims to cut UK greenhouse gas emissions to 34 per cent below 1990 levels by 2020, and to 80 per cent below 1990 levels by 2050.

George Osborne has announced that the Government will simplify the costly and complex Carbon Reduction Commitment scheme for corporate carbon emissions and will review its effectiveness in 2016. The Chancellor said that the scheme, devised by the previous Labour government, could be scrapped altogether after 2016.