MHL has already purchased a site at Elgin Business Park where fit-out costs will total £189,000.

The HIE funding is through the Green Jobs Fund in light of the low carbon and energy-saving benefits of the project.

It is expected to take around a year to complete the new facility, after which it is forecast to create up to 14 full-time equivalent jobs and boost company turnover by around £2.4m within three years.

MHL builds around 40-50 bespoke homes a year in the Moray and Highland area. It is an independent, privately-owned business focused on creating high-quality new build homes in desirable locations.

The firm currently employs 15 full-time equivalent posts. It is building in seven locations in Moray with another three sites and 174 homes due to come on stream in 2022.

The new production facility will enable MHL to deliver EPC “A” rated sustainable and thermally efficient modular timber frame homes on all of its developments for both private and social housing clients.

The reduced heating needs of the new homes will significantly lower carbon emissions and energy bills for the end user.

The increase in factory prefabrication capacity will mean less construction on site, fewer deliveries to construction sites and less waste in materials.

Steve Richards, business development account manager with HIE, said: “This project will provide security for employees of MHL as well as create many new skilled jobs. It will bring about several environmental benefits linked to low carbon and waste reduction. As such it is a great illustration of how companies in the Highlands and Islands are adapting to the challenges of Scotland’s net zero targets while continuing their economic growth. I am very pleased we have been able to support this initiative through the Green Jobs Fund and look forward to continuing to work with MNHL as they develop the new facility.”

John Main, director of MHL, added: “Our new 6500Sq ft production facility represents a significant investment for the business and underpins our commitment to delivering quality energy efficient homes in locations throughout the region.

“The building will be home to our technical and commercial teams and also facilitate the creation of another 14 positions over the coming years including future apprenticeship opportunities within various aspects of the business.

“The new building will also assist in minimizing our business environmental impact with a number of energy-saving features and improve our working environment for the team with a bespoke office layout for improved teamwork and collaborative working.

“We have been planning to relocate our office and create a new timber frame facility for a few years. Elgin Business Park presented us with the ideal opportunity to relocate our business within Moray providing our clients and workforce with good connectivity and a number of sustainable transport options.”