The European Investment Bank has agreed to provide £500 million to support a major reinforcement of the electricity transmission network in the north of Scotland to improve connections between wind, wave and tidal renewable energy schemes and the national power network.

The new power link will help secure the supply of electricity in the Highlands and beyond for generations to come and once operational the new transmission link will supply equivalent electricity to meet the needs of around 2 million Scottish residents.

 The new investment represents the largest investment in the electricity network in the north of Scotland for 60 years and includes a new 1200 megawatt subsea cable between Spittal in Caithness and Blackhillock in Moray. The laying of the subsea cable and associated onshore infrastructure works are expected to support 600 jobs during the construction phase and boost SSE plc’s in-house apprentice, trainee engineer and graduate programmes.

 The £500 million year long-term European Investment Bank loan will support nearly £1.2 billion of overall investment in the electricity transmission network in the north of Scotland by Scottish Hydro Electric Transmission plc, a wholly-owned subsidiary of SSE plc. The first part of the loan totalling £300 million was signed this week and the remainder is expected to be signed next year as the project progresses.

According to David Gardner, Director of Scottish Hydro Electric Transmission plc, the project represents the largest investment in electricity network in the north of Scotland since the hydro development era of the 1950s.

SSE is working closely with local businesses to create a sustainable local supply chain, advertise opportunities for local suppliers and provide opportunities for local firms to benefit from investment in Scotland’s power infrastructure. In December 2014, SSE awarded its largest-ever Living Wage contract – worth £460 million – as part of the Caithness-Moray transmission link.

Over the last decade the European Investment Bank has provided more than £10 billion for investment in 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.

The European Investment Bank is the world’s largest international public bank and is 16% owned by the UK government.

Jonathan Taylor, European Investment Bank Vice President commented:

“Investment in energy infrastructure across the UK is essential to harness the full potential of new and future renewable energy schemes. The European Investment Bank is pleased to provide £500 million to support essential investment by Scottish Hydro Electric Transmission plc that will ensure more efficient transmission of green energy, enable increased use of renewable power in Scotland and secure energy supply to the Highlands and Scotland’s cities. Our strong partnership with SSE over many years demonstrates our firm commitment to support ambitious energy investment that creates jobs and benefits local companies.” 

Lending by the EIB in the UK last year totalled £5.6 billion and supported long-term investment in 40 projects across the country.  This represented the largest annual engagement since the start of EIB lending in the UK in 1973 which has supported nearly £16 billion of overall investment.

In the last 10 years the European Investment Bank has provided more than £3 billion for direct investment in Scotland, with additional investment from UK wide programmes.