The Yorkshire-based company, which supplies its products to the power industry, will use the funding to develop its processing plant and as working capital.

The deal is Foresight’s fourth cleantech investment this year. Investment manager Giles Whitman comments: ‘Silvigen has positioned itself to serve the growing biomass fuel needs of the UK power generation sector and the developing industrial heat sector.

‘The fact that the company has already secured contracts with a major UK power generator is testament to its expertise and the strength of its offering.’

Silvigen was established in 2005 as a consultant to the power industry on fuel processing and biomass fuel supply. In 2006, the company developed a process to convert wood from fast-growing tree species into a fuel that could be used alongside coal in power stations.

It has secured contracts with one UK power generator covering the next ten years and is in talks with others, according to Foresight.

VCTs managed by Foresight and other firms have more than £1 billion to invest in fast-growing ventures. Click here to find out more.