A complete renovation of the hotel includes energy efficient measures and replacing the one remaining wooden chalet with internal bunkhouse accommodation.
Glenuig is a small community of just over thirty people located in the Parish of Moidart in west Lochaber, thirty-five miles from Fort William.
Steve Macfarlane bought over the business in December 2007. It has been closed since October to allow the work to be undertaken during the winter months and expects to reopen in late spring 2009.
Highlands and Islands Enterprise (HIE) has approved assistance of £182,340 towards Mr Macfarlane's own capital to the project - which will ultimately be a low carbon footprint business attracting customers from niche markets.
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Glenuig Inn is the only hotel within a ten mile radius and the main Inn building dates from the 17th Century.
The renovated building is designed to be highly energy efficient including insulation, heat exchangers and solar panels.
A report from the Energy Savings Trust indicates that 70 per cent of the current energy used in the Glenuig Inn could be saved by implementing these green measures.
Mr Macfarlane aims to capitalise by committing to the Green Tourism Business Scheme - the UK's sustainable tourism certification scheme.
Businesses opting to join are assessed by a qualifying grading advisor against a rigorous set of criteria covering a range of areas including energy and water efficiency, waste management and biodiversity.
Businesses that meet the required standard receive a bronze, silver, or gold award based on their level of achievement.
HIE's Robert Muir, area manager for Lochaber, Skye and Wester Ross said: "This tourism project is based within a fragile area in Lochaber, and is the final step in a phased upgrading of the Glenuig Inn.
"The growing awareness of green tourism among Highland businesses is rising and one of our priorities is to meet the high standards expected from business and leisure travellers seeking a green tourism experience."
After the upgrade, niche markets will be targeted throughout the year making the hotel more profitable with the mixture of accommodation, food and beverage sales.
Mr Macfarlane said: "Taking responsibility for the environment and local community is an important part of our commitment to the sustainable development in the hotel."
(GK/JM)
