The Equitix managed fund Energy Savings Investments, in which GIB is a cornerstone investor, will contribute £14.6 million, with an additional £15 million of private capital coming from the Equitix Energy Efficiency Fund.
The 6.5MW plant was developed by private energy company UYE and will be built as combined heat and power ready.
When completed in March 2017, it is expected to cut carbon emissions by 12,700 tonnes per year throughout its life.
GIB head of investment banking Ed Northam said the project “typifies the role” of the GIB in helping developers to utilise innovative technology to “create new sources of green power to cut carbon emissions and create important local benefits for communities”.
UYE director Stephen Brooks said: “We see that these local, community-scale energy generation projects are one of the ways to reduce carbon emissions, reduce grid losses and generate useable, sustainable and affordable heat for local communities. This project is the first in our proposed portfolio of similar developments.
“Many people told us that we would never be able to compete with the large energy generation companies, but thanks to the help, support and innovative thinking of the GIB and Equitix we have been able to fund this project and bring it through to construction.”
Last month, GIB announced it is set to move into the private sector in order to access larger pools of capital with which to finance new sustainable investments. So far GIB has committed a total of £2 billion to 50 UK projects worth more than £8 billion.