Up to £200,000 will be invested in the Isle of Raasay Distillery.
The investment, from Highlands and Islands Enterprise (HIE), will help create up to five local jobs, as well as fund bottling facilities and additional warehousing.
Alasdair Day, Isle of Raasay Distillery co-founder said: “This support from HIE for new warehouses and bottling facilities will ensure that every drop of our spirit is matured and bottled locally while, crucially, supporting local island jobs in what is deemed a fragile rural economy.
"Already, over 10% of the local population work at the distillery, and with HIE’s support, we hope to create more opportunities to live and work on Raasay.”
The Isle of Raasay Distillery has been distilling since 2017, while running six luxury bedrooms and a five-star visitor centre, winning Tourism Destination of the Year at the 2019 Scottish Whisky Awards.
This year saw the release of the Isle of Raasay Gin.
Over the next three years the product expansion is expected to increase the company’s turnover by more than £2.4m, two-thirds of which will be from international sales.
The first batch of Isle of Raasay Single Malt whisky is due for release in November 2020.
Eilidh Ross, business growth account manager with HIE’s Lochaber, Skye and Wester Ross team, said: “The Highlands and the Islands region is renowned for its food and drink as well as tourism offerings. The Isle of Raasay Distillery is already an important contributor to this growth sector. By creating valuable rural employment, the company is also helping strengthen community resilience on the island.
“We are very pleased to be able to provide support for this project and look forward to working with the company as they develop their product line in this rural island economy.”