EIB backs Scottish renewables subsea cable project

Scotland will receive a £500m loan from the European Investment Bank (EIB) for a 1.2GW subsea cable. The project will improve connections between offshore wind, wave and tidal projects and the national power network, securing supply to the Highlands and Scottish cities. The loan will support £1.2b of investment in the power transmission network in the north of Scotland by the wholly-owned subsidiary, Scottish Hydro Electric Transmission. The EIB said today it has signed the first £300m part of the loan. The other £200m will be agreed in 2017 as the project progresses. 

The European Investment Bank has agreed to provide GBP 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 GBP 500 million long-term European Investment Bank loan will support nearly GBP 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 GBP 300 million was signed this week and the remainder is expected to be signed next year as the project progresses.

“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.” said David Gardner, Director of Scottish Hydro Electric Transmission plc.

“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 GBP 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.” said Jonathan Taylor, European Investment Bank Vice President.

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 £460m – as part of the Caithness-Moray transmission link.

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

Over the last decade the European Investment Bank has provided more than GBP 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.

Lending by the EIB in the UK last year totalled GBP 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 GBP 16 billion of overall investment.

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