A minimum of £38 million was awarded to Warmworks, a managing agent which aims to deliver the Scottish Government’s fuel poverty scheme over the next two years.
But campaigners warned further funding would be needed if ministers were to truly eradicate fuel poverty north of the Border.
Last year, a target was set that no more than five per cent of households in Scotland would be in fuel poverty by 2040.
The funding was awarded by Warmer Homes Scotland, a Government scheme designed to help people in need make their homes warmer and more comfortable by installing energy saving measures.
On a visit to Dundee to meet the 15,000th Warmer Homes customer, housing minister Kevin Stewart said the investment, and the extension of Warmer Homes Scotland to 2022, demonstrates the Government’s commitment to eradicating fuel poverty and increasing energy efficiency.
Mr Stewart said: “This funding will have a huge impact for people seeking to make essential improvements to the energy efficiency of their home.
“We have taken a world leading approach to tackling fuel poverty with the introduction of the Fuel Poverty Bill and setting an ambitious target that by 2040, no more than 5% of Scottish households are in fuel poverty.
“I’m delighted to see for myself the excellent work being done in homes across Scotland.”
Elizabeth Leighton, director of Existing Homes Alliance Scotland, said half a million households suffered from fuel poverty.
“A continutation of Warmworks is welcome as they are doing a good job in making people’s lives better, as well as delivering local jobs,” she said.
“But we would have liked to have seen a much bigger funding award. Too many people - more than the population of Glasgow - are at risk of fuel poverty already.
“A bigger budget would allow more people to be helped. This should be the last generation of Scots who face fuel poverty.”
A spokeswoman for the Child Poverty Action Group said: “The cost of fuel is an unavoidable burden on Scottish families living in poverty. One in five people in Scotland are living in poverty and 240,000 children are having their childhoods limited by its effects. Taking action to boost incomes has never been more important.”