The Scottish government has created a new fund to help renewables within rural areas. The £500,000 pot of public money has been set aside to help SMEs, land managers and farmers to manage clean energy schemes across Britain's countryside.

Called the Rural Energy Challenge Fund, it will operate across Scotland and be delivered via the Community and Renewable Energy Scheme (CARES). This scheme was created in 2011 to provide loans for renewable energy projects in the early pre-planning consent phase, which is naturally high-risk and tends to put off private investors, who want the certainty of returns.

The government said that the new fund will offer financial help for renewable, low-carbon and whole system energy projects for electricity, heat, energy management and transport.

A Local Energy Scotland spokesperson and Cares scheme manager, Chris Morrison, said that the fund offered an opportunity for social enterprises and businesses in Scotland's rural communities to progress plans that would improve their local communities, providing clean energy, reducing greenhouse gas emissions and helping to create jobs and boost the local economy.

He said that Local Energy Scotland would support all applications and would welcome interest at the early engagement stage to help ensure projects were developed successfully.

Paul Wheelhouse, the Minister for Business, Innovation and Energy, said that the fund could provide a positive impact in the longer term for Scotland's communities, helping to support a radical new approach to clean-energy generation with the focus on local community ownership and control. He added that clean energy projects would help rural communities to improve their energy security of supply and take ownership of solutions to the energy challenges that they faced at a local level.

Grants from the new fund will be available up to £150,000.