The funding allows to commence work on the £25m green energy centre on the 36-acre site of a former paper mill at Guardbridge.

The loan comes from the Scottish Partnership for Regeneration in Urban Centres Fund, a joint Scottish Government and European Regional Development Fund initiative, managed by Amber Infrastructure.

It will utilize locally-sourced wood stock from the Scottish forestry market to heat and cool laboratories and student accommodation in the university.

The Scottish Funding Council and the university itself have granted £10m and £4m respectively for the centre.

The centre, which is expected to start operations by December 2015, will save around 10,000 tons of carbon dioxide per year.

Amber Infrastructure head of origination in Scotland Cameron Cook said: "The Guardbridge project is a ground breaking initiative that will deliver significant economic activity within the area and substantial environmental benefits in the form of carbon dioxide savings."

Scottish Social Justice Secretary Alex Neil added: "The centre’s projected carbon savings will help the environment and the local area will benefit from the university’s commitment to job creation and apprenticeships."

Image: The Guardbridge Energy Centre is expected to start operations by December 2015. Photo: Courtesy of The University of St Andrews.