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Hospitals, leisure centres, local authorities and central government departments will be able to save money and reduce their carbon emissions by taking up new energy efficiency loans.

The Government, in partnership with Salix Finance and the Carbon Trust will provide 拢51.5 million in interest free loans to help public sector organisations take advantage of energy efficiency technology.

Minister for energy and climate change Joan Ruddock said: 鈥淲e estimate this fund could help public sector bodies save around 拢14 million per year in fuel bills. Following the announcement of our carbon budgets, all public sector organisations should lead by example by pioneering ways to reduce carbon emissions. I hope that schools, hospitals, and fire stations will look into projects they can undertake, and use this funding opportunity.鈥�

Announced by the Chancellor in the Budget, this money is an addition to 拢30m million announced last year for the scheme in 2008-20012 and will be available through Salix Finance. Loans will be available for around 80 different energy efficiency technologies, including boiler and lighting upgrades, improved cooling systems and IT energy efficiency improvements.

This support will play an important part in the build up to the Carbon Reduction Commitment (CRC), which begins in April 2010. The CRC is a mandatory scheme which targets carbon dioxide emissions from large public and private sector organisations, which use more than 6000 MWh of electricity per year. It will provide incentives for these organisations to record and reduce their energy use, and improve energy efficiency, saving an estimated 4 million tonnes of CO2 a year by 2020.

Carbon Trust chief executive Tom Delay said, 鈥淭he Carbon Trust has helped over 2000 UK public sector organisations identify savings of 拢500 million in energy costs and carbon emissions of over 4.5 million tonnes since 2001.

鈥淢any organisations have already taken bold action on climate change and we hope their example inspires many more in the public sector to follow suit. Thanks to new funding from the Government they now have the financial means to do so.鈥�