The government has been urged to back state-guaranteed loans for district heating projects in a bid to help more schemes up and running.

The call came from the ­Combined Heat and Power ­Association (CHPA), which said district heating needed both short and medium-term ­support to deal with “difficult” ­market conditions.

It said projects were stalled because the cost of capital was too high and financing options too ­limited.

The CHPA wanted the Department of Energy and Climate Change to provide “modest” short-term support – for two to three years – in the early development phase and state-backed infrastructure loan guarantees in the medium term so that low rate, low risk institutional finance could invest “at the scale required”.

This article first appeared in Utility Week’s print edition of 23rd November 2012.

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