A shale oil processing company in Estonia has been given a loan worth €35 million (£27.4m) for projects aimed at reduce emissions.

The cash will be used by Viru Keemia Grupp (VKG) to finance the construction of two fuel gas desulphurisation plants – which will remove sulphur dioxide (SO2) from the gas before it is released into the atmosphere, reducing the firm’s environmental impact.

The loan will also help finance a steam turbine and boiler.

The projects, expected to cut both sulphur and carbon emissions, are part of the firm’s major investment programme to build two production facilities in a bid to boost capacity.

Riccardo Puliti, Managing Director, Energy and Natural Resources at the European Bank for Reconstruction and Development (EBRD) said: “With our loan we are strengthening energy security in Estonia by supporting initiatives to use the country’s own resources in a sound and responsible way.”

The shale oil processing industry generates around 3% of Estonia’s GDP, according to the EBRD.