A combined heat and power (CHP) plant in Sheffield is receiving backing from the UK Green Investment Bank (GIB).
It is investing £14.6 million in the project and an additional £15 million of private capital has been raise from Equitix Energy Efficiency Fund (EEEF).
The EEEF is part of Energy Savings Investments (ESI), in which GIB is an investor.
The CHP plant, which will be built in the Holbrook area by UYE (UK) Limited, will generate more than 6.5MW of green electricity.
It will have the potential to supply heat to more than 6,700 homes and commercial properties.
The project is expected to cut greenhouse gas emissions by around 12,700 tonnes of carbon emissions every year – equivalent to taking 5,700 cars off the road.
Once operational, it will sell electricity to GDF SUEZ Energy UK under a long-term power agreement.
Stephen Brooks, Director, UYE said: “We see local, community-scale energy generation projects as one of the ways to reduce carbon emissions, reduce grid losses and generate useable, sustainable and affordable heat for local communities.”