The first hydro scheme in Scotland to be developed and wholly-owned by the community will be created on Forestry Commission land near Callander.
Almost £2 million of funding has been secured to enable the construction of the pioneering low-carbon project in the heart of the Loch Lomond and Trossachs National Park.
Callander Community Hydro Ltd (CCHL) aims to generate significant quantities of renewable energy, which will then be sold to the national grid to generate income for the local community.
The scheme which should produce enough energy to provide electricity for around 300 homes a year could, in fact, generate up to £2.85m over a 20-year period, which will support a range of projects in the area.
Energy minister Fergus Ewing announced new grants for the project as he spoke at the Scottish Government’s Community and Renewable Energy Scheme (CARES) conference in Glasgow.
“Our ambition is for all communities across Scotland to share in the rich economic and social rewards of our country’s outstanding renewable resources,” he said.
“The funding announced today is an important milestone for the Callander community.
“It takes it a step closer to owning and operating a hydro project, in a national park, that will deliver community benefits of up to £2.85 million over a 20-year period.
“The money from the project will be reinvested back into the community, helping it to become stronger and more sustainable.”
The scheme will be “sympathetically” constructed on land managed by Forestry Commission Scotland and will be located north-west of Callander.
It will divert water from a river down a hidden pipeline into a turbine to produce power before being returned to the stream downriver.
CCHL chairman Frank Park said he was thrilled the group was “leading the way in community hydroelectric schemes”.
“This funding enables the construction of the project to go ahead,” he went on.
“Though that is the final stage in this ambitious community project, it is only the start of the dream for Callander.
“Key priorities for the community are identified in the Callander Community Action Plan and the end objective of this project is to plough profits back into these community projects.
“We come a step closer to that becoming a reality today and we are also grateful for the previous financial support from CARES, LEADER and a large number of organisations and individuals that has helped us to get to this point,” he added.
The Callander project has also been described as a “trailblazing” development by the head of the Renewable Energy Investment Fund.
Forest Enterprise Scotland chief executive Simon Hodge, meanwhile, said he was pleased the national forest estate was being used to provide renewable energy and benefit communities.
“Across Scotland, we are working with a number of energy companies to develop small-scale hydro schemes,” he said.
“There is a growing interest from communities in these developments and we are assisting them in reaping the benefits.”