It plans to finance a range of sustainable energy projects from retro-fitting buildings with more energy efficient heating and lighting to on-site wind power and ground source heat pumps. The fund is backed by Funding for Lending, so RBS will be able to lend at lower rates.

 

RBS's corporate and institutional banking division is running the fund and will lend to businesses with a turnover of more than £25m.

 

Chris Sullivan, chief executive of RBS Corporate bank, said: "Businesses of all shapes and sizes can make significant savings from being more efficient as energy costs continue to rise. We hope to offer businesses both an incentive and a solution to transforming their energy use and carbon footprint.

 

RBS said it was the biggest lender to UK renewable projects last year and has embarked on a number of energy efficiency measures within its own business.