The funding, according to Welsh environment minister Jane Davidson, will benefit at least 21 communities.

The scheme called Save, or ‘Arbed’ in Welsh, will upgrade the energy efficiency of existing homes of the most deprived parts of the country and also provide a boost to jobs, skills and regeneration.

It aims to improve energy efficiency in 6,000 homes by March 2011, not only saving people money, but also lowering carbon emissions in our continuing commitment to tackle climate change.

Kick-start the economy by providing contracts to local companies and boosting an energy efficiency and renewable energy industry in Wales

The government hope the funding will stay local by making companies successful in bidding for work through the scheme employ local people and deliver 156 training days for every £1M of funding.

Speaking in the village of Markham in Caerphilly Ms Davidson said: “Wales is leading the way in the UK with this innovative scheme that focuses on energy efficiency.

“But it is truly sustainable because we will be reducing fuel costs and helping those most in need who are in fuel poverty, and making local job creation and training a key part of the schemes.

“At the start of Sustainability Week this shows how the Assembly Government can coordinate energy efficiency, economic and social action to have a real impact on people’s lives.

“I am committed to tackling climate change and Save demonstrates the Assembly Government’s commitment to take practical action to help Welsh residents.”

Luke Walsh

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