Big Society Capital has confirmed a £1m loan to carbon reduction charity Pure for a fund providing low-interest loans to help community-led projects in deprived communities install renewable energy equipment. 

The Pure Community Energy Fund has been funded with a £1m investment from Big Society Capital; and donations from Barclays and British Airways of £450,000 combined.

To date, Pure’s fund has issued around £150,000 of loans at a 4 per cent interest rate  to five community-based projects and plans to fund up to 70 community energy projects. Its loans so far have ranged from £10,000 to £70,000.

Robert Rabinowitz, chief executive of Pure, said it wanted to raise more investment for the fund from debt providers and crowdfunding, and hopes it will eventually raise £10m. All investments will be made in areas in the bottom half of the government’s index of multiple deprivation.

The fund was launched to corporate investors last night at the Cabinet Office.

Speaking at the launch, Nick O’Donohoe, chief executive of Big Society Capital, said Pure’s concept was “simple but powerful”: “Corporations have come together and worked with Pure in a way which allows them to provide long-term patient capital at reasonable prices and allows Pure to be sustainable.”

Pure has estimated that the projects funded to date will reduce C02 emissions by 1,200 tonnes and generate over £500,000 of new community revenues.