A Challenge Fund has been launched to encourage the development of large scale water source heat pump schemes in Scotland. Water source heat pump technology extracts heat from water sources such as rivers, canals, and lochs to supply low carbon heat efficiently. The Water Source Heat Pumps Challenge Fund, which is part of the Low Carbon Infrastructure Transition Programme, will support the development of large scale projects which need assistance to attract further investment. £375,000 is being made available to help with the development of investment grade business proposals. A further £2 million will be available to those with a fully developed investment grade business proposal but who have been unable to identify private investment and are therefore seeking financial support for commercially viable demonstrator project activity.