Distilleries in Scotland are set to receive a funding of £5m for energy efficiency projects from UK Green Investment Bank (GIB).

Equitix-managed fund Energy Saving Investments, in which GIB is the cornerstone investor, alongside the Equitix Energy Efficiency Fund is investing, under a partnership with Balcas, a British manufacturer of wood pellet biomass.

The investment, which is expected to create new jobs, will also support the local supply chain.

According to GIB, Bacardi-owned Aberfeldy distillery is said to take advantage of the funding, which follows the bank’s announcement of an investment in 2013 at the Tomatin distillery located near Inverness.

As part of the initiative, the existing inefficient, heavy fuel oil boilers in the distilleries will be replaced by new biomass boilers in order to lower energy costs as well as greenhouse gas emissions.

The boilers use sustainably sourced wood pellet fuel to produce steam that will be used in the whiskey production process.

Bacardi global technical director Stuart Lowthian said implementation of a sustainable energy solution for its Aberfeldy distillery will reduce the company’s carbon footprint by around 90%..

"These investments underline our "Good Spirited" global sustainability initiative to work with partners to build a sustainable future. We are hoping to make further investments in sustainable power in Scotland in the future," added Lowthian.

The company’s first investment was in its Bombay Sapphire gin distillery at Laverstoke Mill and the latest one will be its second investment in biomass solutions for energy generation.

Bacardi estimates that the project will replace 100% of the heat currently generated from fuel oil and reduce the distillery’s carbon footprint, considerably.