The European Investment Bank (EIB) is to provide £500m in financing to build new transmission link to wind, wave and tidal energy schemes north of Scotland.
EIB funding will support nearly £1.2bn of investment in the region’s electricity transmission network by Scottish Hydro Electric Transmission.
Of the total funding, £300m was signed this week and the remainder is expected to be signed next year as the project progresses.
EIB vice-president Jonathan Taylor said: “Investment in energy infrastructure across the UK is essential to harness the full potential of new and future renewable energy schemes.”
The investment will see construction of a new 1,200MW subsea cable between Spittal in Caithness and Blackhillock in Moray.
Nearly 600 jobs will be created during the laying of the subsea cable and associated onshore infrastructure works.
The cable uses high-voltage direct current (HVDC) technology to transport power between converter stations as the technology allows efficient transmission of large volumes of electricity across long distances.
Once operational, the new transmission link will supply electricity that will be enough to meet the needs of around two million Scottish residents.
Scottish Hydro Electric Transmission director David Gardner said: “This project represents the largest investment in electricity network in the north of Scotland since the hydro development era of the 1950s and we are proud to be an integral part of it; delivering value for money while reinforcing the network, allowing for the connection of new generation and providing a more resilient power supply to those who live and work in the area.”
EIB has provided more than £10bn towards development of energy infrastructure across the UK including renewable energy schemes, national transmission networks and regional power distribution as well as inter-connectors to Ireland, France and the Netherlands during the last decade.
In 2015, the bank provided £5.6bn in loans to the UK and supported long-term investment in 40 projects across the country.