The firm is contributing £750,000, bringing its total investment in Eco-Solids to £1.6 million.

Up to £500,000 of the money is in the form of a convertible loan to be drawn down on a monthly basis, while the balance has been made available as a loan facility to fund delivery of projects where contracts have been signed.

LCA has previously invested £850,000 in Eco-Solids for a stake of 45 per cent in the company. This latest investment, which does not immediately increase its shareholding, may be converted to equity following a proposed wider funding round.

The funding allows Eco-Solids to recruit two new executives. Kevin Breen, who formerly headed LSE-quoted university spin-out City Technology, joins as CEO, while John Carolin, previously head of energy innovation at gases and engineering group Linde, becomes the company’s chief operating officer.

Simon Hunt, chairman of intellectual property (IP) commercialisation business IPSO Ventures, will join Eco-Solids’ board as a non-executive director.

Eco-Solids’ two flagship technologies are cell-disintegration process Cellruptor (formerly known as Bug Buster) and the ES-process, which destroys germs in sewage sludge so that the end product can be used in construction materials.

Low Carbon Accelerator listed on AIM in October 2006, raising £44.5 million. The company takes significant minority holdings (usually more than 25 per cent) in unquoted businesses providing low-carbon products and services.