The Scottish Secretary for Rural Affairs and Environment, Richard Lochhead, has announced a £2.4 million fund to encourage the development of renewable energy schemes on rural land. The fund will be made available to farmers and rural land managers, via the existing Communities and Renewable Energy Scheme (CARES), through a new Loan Fund.

Farmers and land managers will be able to make applications to the CARES Loan Fund from April 2011.  

In order to gain access to the Fund, farmers and land managers will have to form partnerships with local communities for the purpose of sharing revenue from the developed project.  

Last year, the CARES grant fund supported 300 community projects, which are expected to generate in excess of £20 million over 20 years. As well as funding, CARES provides support and advice at a local level, and is open to community groups, land managers, local businesses and co-operatives.  

The principal purpose of CARES is to provide funding towards the pre-planning costs of progressing a scheme, including, for example, environmental assessments or river flow analysis; up-front costs which are a potential deterrent to rural and community schemes. Loans of up to £150,000 are available, repayable at a commercial rate if the scheme achieves planning permission, but will be written off if it does not.  

When announcing the new funding, Richard Lochhead commented,  

"Renewable energy generation at a local level has the potential to be a real money spinner. However, I am told repeatedly by farmers that, while aware of the benefits to be obtained from renewables, they are put off pursuing schemes because of the expense of reaching the pre-planning stage. This scheme is designed to cover the risk of the pre-planning stage by offering loans of up to 90 per cent of the costs, providing there's a minimum community benefit from the project. This is in addition to the Feed-In-Tariffs and the proposed Renewable Heat Incentive."