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District Heating Loan

Get funding support for your district heating projects

Make your district heating project more affordable

About The District Heating Loan Fund

As the cost of home heating continues to increase, it has never been more important to ensure our communities develop affordable, locally produced heat which will cut fuel bills and carbon emissions.

The Scottish Government’s district heating loan fund is designed to help address the financial and technical barriers to district heating projects as commercial borrowing can be extremely expensive and difficult to obtain.

Loans of up to £1M + are available as low interest unsecured loans with repayment terms of either 10 or 15 years. Loans for larger projects above £500K will be considered on a case by case basis. Loans of over £1M could involve co-investment with a potential range of funding partners*. A typical interest rate of 3.5 per cent applies for low risk projects (dependent upon credit status). The scheme is open to local authorities, registered social landlords, small and medium sized enterprises and energy services companies [ESCOs] with less than 250 employees.

Since 2011, more than £15M has been lent to 50 different projects across Scotland. These projects have generated benefits such as providing affordable warmth to householders, creating local employment, reducing costs for businesses and reducing greenhouse gas emissions.

Looking for funding? Express an interest

If you have district heating projects which you would like to be considered for this year’s funding round then please download the expression of interest form. Once you submit your expression of interest we will then be able to contact you to discuss your project in more detail.

District Heating case studies

Watch a case study on a district heating project serving householders, public buildings and businesses in Wick.

This case study below looks at a district heating project serving the Loch Ness Shores campsite in the village of Foyers

Find out  how a district heating loan fund helps supports householders in Oldmeldrum (Aberdeenshire) reduce their fuel bills

District heating loans evaluation 

Warm Homes Fund case studies 

Find out about some of the successful projects that have been funded by the programme, including district heating projects.

Database of renewable heat installations

The Scottish Government has set a target for 11 per cent of non-electrical heat demand in Scotland to come from renewable sources by 2020.

In order to help measure progress towards this target, the Energy Saving Trust maintains a database of renewable heat installations on behalf of the Scottish Government. The database records installations known to be operating and those currently in various stages of development, and contains data on the capacity and yearly heat output of those installations.

The latest report can be accessed here: Renewable Heat in Scotland 2018



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