British businesses are wasting billions of pounds on energy every year because they are too shortsighted to replace old power-guzzling equipment, the Carbon Trust says.

According to the government’s energy agency, business is squandering £3.3bn a year on energy because it refuses to make the upfront investment to replace outdated energy-hungry equipment.

The Carbon Trust’s research shows that 46 per cent of businesses are unaware that they can save money by replacing ageing equipment.

Researchers also found that 52 per cent believe that they do not have the money to upgrade equipment, with 41 per cent accepting higher energy bills in preference to shouldering the upfront cost of replacing equipment.

In an attempt to tackle the problem, the Carbon Trust is launching a £100m scheme to encourage businesses to refit. The Big Business Refit campaign, fronted by Dragons' Den star Theo Paphitis, will make interest-free loans available to small- and medium-sized businesses to cover the cost of refit work.

Theo Paphitis said: “The Big Business Refit calls on all UK businesses to scour their premises for old equipment, from air conditioning, to fridges, compressors to factory machinery.  With interest-free funding available to replace equipment, leading to average energy savings of 15 per cent, and no security required, it’s an unbelievable deal.”

As well as offering unsecured, interest-free loans of between £3,000 and £400,000, guidance “clinics” will be held in major UK cities to allow firms access to expert advice. Businesses will also be offered a free energy saving assessment.

Gareth Elliott, senior environment policy adviser at the British Chambers of Commerce, said: “In the current downturn cash is king and the first place struggling businesses should look to redeem cash is in their business premises where it’s possible to eliminate energy wastage. 

“The Carbon Trust loans scheme offers a practical solution for business survival through energy efficiency and we’d encourage businesses across the UK to take advantage of the funding available.”

Mayor of London, Boris Johnson, said: “I want to give my backing to the Carbon Trust's Big Business Refit. At a time of economic downturn it is a great way to help businesses install energy efficient equipment and save money on their energy bills.

“This is a fantastic scheme both for London's businesses and the environment and we will be promoting it later this year through the London Development Agency's business support services, such as Business Link.”

According to the Carbon Trust, around 3,000 UK SMEs could benefit from the scheme, saving a combined £40m annually. The Big Business Refit runs until 31 March 2010