PeoplesBank has provided $2.5 million in financing to help increase the efficiency of a Holyoke Gas & Electric Company (HG&E) hydroelectric generator.

According to James M. Lavelle, manager of HG&E, the financing will be used to overhaul one of the company’s 32 hydroelectric generators, the fourth in recent years. The generator was originally installed in 1921, and was rated at 500 kilowatts. In its current state, it is producing only 200 kilowatts.

After being refurbished, Lavelle said the generator will be rated at 700 kilowatts, and will produce enough electricity on its own in one year to power roughly 250 homes.

This latest financing package brings the bank’s total financing for sustainable energy projects to $22.5 million, which includes $14 million for wind energy projects in Western and Central Massachusetts, and $8.5 million for hydroelectric power generation projects at HG&E, the bank said.