Funding of up to £42 million from the Scottish Government will support the construction of the country’s biggest low carbon housing development on former industrial land at Granton in Edinburgh. Work is expected to start early next year on the site which will feature 847 net zero homes, including 387 affordable homes, and a new primary school and space for 14 businesses.

It is part of a wider £1.3 billion programme to regenerate Granton Waterfront which will ultimately deliver 3,500 new homes, space for leisure facilities and Scotland’s largest coastal park.

The new funding package is being provided to the City of Edinburgh Council over a 20-year period. Payment is conditional on the council meeting targets, including creating job and apprenticeship opportunities and investing in non-profit organisations to tackle disadvantage in the north of Edinburgh.

Deputy first minister Kate Forbes said: “This investment demonstrates our commitment to tackling Scotland’s housing and climate emergencies while supporting communities that need it most.

“By working in partnership with the City of Edinburgh Council, we’re unlocking £220m in private sector investment to transform Granton Waterfront into a thriving coastal community with hundreds of net zero homes, a new school and business space.

“Communities in Granton are at the centre of this project and will directly benefit from improved transport links, green spaces and job opportunities as we regenerate this important brownfield site.”

City of Edinburgh Council leader Jane Meagher said: “I welcome this funding to help us deliver the first phase of this hugely significant £1.3bn regeneration project at Granton Waterfront in the north of the capital.

“The regeneration of Granton Waterfront is about helping make Edinburgh more inclusive by improving educational attainment, health and well-being, local employment opportunities and eradicating child poverty. I’m really pleased we’ve received this new funding as we’re committed to delivering these important outcomes to create better opportunities for the people living in this area.”