diff --git a/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoProjectGenerator.java b/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoProjectGenerator.java
index 6964fa9da1c..05c24cc48be 100644
--- a/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoProjectGenerator.java
+++ b/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoProjectGenerator.java
@@ -24,7 +24,6 @@ import org.eclipse.cdt.core.model.IPathEntry;
 import org.eclipse.core.resources.IBuildConfiguration;
 import org.eclipse.core.resources.ICommand;
 import org.eclipse.core.resources.IFile;
-import org.eclipse.core.resources.IFolder;
 import org.eclipse.core.resources.IProject;
 import org.eclipse.core.resources.IProjectDescription;
 import org.eclipse.core.resources.IncrementalProjectBuilder;
@@ -72,14 +71,10 @@ public class ArduinoProjectGenerator {
 		Map<String, Object> fmModel = new HashMap<>();
 		fmModel.put("projectName", project.getName()); //$NON-NLS-1$
 
-		IFolder sourceFolder = project.getFolder("src"); //$NON-NLS-1$
-		if (!sourceFolder.exists()) {
-			sourceFolder.create(true, true, monitor);
-		}
-		IPathEntry[] entries = new IPathEntry[] { CoreModel.newOutputEntry(sourceFolder.getFullPath()) };
+		IPathEntry[] entries = new IPathEntry[] { CoreModel.newSourceEntry(project.getFullPath()) };
 		CoreModel.getDefault().create(project).setRawPathEntries(entries, monitor);
 
-		sourceFile = sourceFolder.getFile(project.getName() + ".cpp"); //$NON-NLS-1$
+		sourceFile = project.getFile(project.getName() + ".cpp"); //$NON-NLS-1$
 		templateGen.generateFile(fmModel, "arduino.cpp", sourceFile, monitor); //$NON-NLS-1$
 	}
 
diff --git a/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoTemplateGenerator.java b/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoTemplateGenerator.java
index 56fc5b9aa44..28b664c7f02 100644
--- a/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoTemplateGenerator.java
+++ b/toolchains/arduino/org.eclipse.cdt.arduino.core/src/org/eclipse/cdt/arduino/core/internal/ArduinoTemplateGenerator.java
@@ -3,6 +3,8 @@ package org.eclipse.cdt.arduino.core.internal;
 import java.io.ByteArrayInputStream;
 import java.io.File;
 import java.io.IOException;
+import java.io.InputStreamReader;
+import java.io.Reader;
 import java.io.StringWriter;
 import java.net.URISyntaxException;
 import java.net.URL;
@@ -16,22 +18,19 @@ import org.eclipse.core.runtime.IStatus;
 import org.eclipse.core.runtime.Path;
 import org.eclipse.core.runtime.Status;
 
+import freemarker.cache.TemplateLoader;
 import freemarker.template.Configuration;
 import freemarker.template.Template;
 import freemarker.template.TemplateException;
 
-public class ArduinoTemplateGenerator {
+public class ArduinoTemplateGenerator implements TemplateLoader {
 
 	private final Configuration config;
+	private Path templateRoot = new Path("/templates"); //$NON-NLS-1$
 
 	public ArduinoTemplateGenerator() throws CoreException {
 		config = new Configuration(Configuration.VERSION_2_3_22);
-		URL templateDirURL = FileLocator.find(Activator.getContext().getBundle(), new Path("/templates"), null); //$NON-NLS-1$
-		try {
-			config.setDirectoryForTemplateLoading(new File(FileLocator.toFileURL(templateDirURL).toURI()));
-		} catch (IOException | URISyntaxException e) {
-			throw new CoreException(new Status(IStatus.ERROR, Activator.getId(), "Template configuration", e));
-		}
+		config.setTemplateLoader(this);
 	}
 
 	public void generateFile(final Object model, String templateFile, final IFile outputFile, IProgressMonitor monitor)
@@ -51,8 +50,39 @@ public class ArduinoTemplateGenerator {
 			}
 		} catch (IOException | TemplateException e) {
 			throw new CoreException(
-					new Status(IStatus.ERROR, Activator.getId(), "Processing template " + templateFile, e));
+					new Status(IStatus.ERROR, Activator.getId(), "Processing template " + templateFile, e)); //$NON-NLS-1$
 		}
 	}
 
+	@Override
+	public Object findTemplateSource(String name) throws IOException {
+		return FileLocator.find(Activator.getContext().getBundle(), templateRoot.append(name), null);
+	}
+
+	@Override
+	public long getLastModified(Object source) {
+		try {
+			URL url = (URL) source;
+			if (url.getProtocol().equals("file")) { //$NON-NLS-1$
+				File file = new File(url.toURI());
+				return file.lastModified();
+			} else {
+				return 0;
+			}
+		} catch (URISyntaxException e) {
+			return 0;
+		}
+	}
+
+	@Override
+	public Reader getReader(Object source, String encoding) throws IOException {
+		URL url = (URL) source;
+		return new InputStreamReader(url.openStream());
+	}
+
+	@Override
+	public void closeTemplateSource(Object arg0) throws IOException {
+		// Nothing to do
+	}
+
 }