Cash is to be given to Powys County Council to help build a controversial business park near Newtown.
The Welsh Government has announced funding towards the Abermule Business Park. The money will be used towards the building of businesses units.
The park will be alongside the controversial bulk recycling facility.
The plans for the business park and the recycling facility have been controversial in the village.
The Welsh Government has announced £2.8m for projects in Mid and West Wales to help the region recover from the impact of coronavirus.
Six projects are receiving funding.
Economy Minister Ken Skates said: “I am delighted that Welsh Government funding will accelerate the delivery of important infrastructure projects in Mid and South West Wales.
“This past year has placed incredible pressures on our businesses and economy, but today’s news will be a boost to the area and the firms and residents that will benefit.
“Our Economic Resilience and Reconstruction Mission aims to rebuild the Welsh economy so that it is more prosperous, fair and green than ever before and these projects truly support that vision.
“I am also pleased we are investing in improving technology in the region. The pandemic has really shown us the power and importance of digital in how we live and work.
“We are committed to supporting businesses and communities throughout Wales as we aim to return to the economic growth we were seeing before the pandemic and today’s news is a clear demonstration of that.”