The Green Investment Bank will provide £18m towards funding a biomass energy centre to power two Cambridge hospitals, marking the institution's first investment in the NHS.

Non-domestic energy efficiency is a one of four core sectors the £3bn bank has targeted, along with financing for the Green Deal, waste, and offshore wind. The bank kicked off its dealings in this latter sector with a £57.5m investment in the Rhyl Flats wind farm last week.

Should planning permissions be approved, the new energy innovation centre will house a combined heat and power unit, biomass boiler, efficient dual fuel boilers and heat recovery from medical incineration. It will be developed and operated by MITIE to provide heat and power to the Addenbrooke's and Rosie Hospitals.

Cambridge University Hospitals NHS Foundation Trust, which operates the hospitals, is predicted to save over £20m in energy costs over 25 years, as well as displacing more than 25,000 tonnes of CO2 emissions per year.

Business Secretary Vince Cable said the investment with Aviva would "help to deliver much-needed energy and financial savings" for these hospitals, as well as other parts of the NHS.

"The size of the NHS estate means there will be huge opportunities to invest further in building energy centres like the one planned for Cambridge University Hospitals NHS Foundation Trust," he added.