What is being hailed as the largest investment in the electricity network in the north of Scotland for 60 years, is being backed by a £500m loan from the European Investment Bank (EIB).

It provides a crucial element in the near £1.2billion development by Scottish Hydro Electric Transmission, a wholly-owned subsidiary of SSE. Included is a new 1200 megawatt subsea cable between Spittal in Caithness and Blackhillock in Moray.

It will improve connections between wind, wave and tidal renewable energy schemes in the north and the national power network.

The laying of the subsea cable and associated onshore infrastructure works are expected to support 600 jobs during the construction phase

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

The first part of the loan totalling £300m was signed this week and the remainder is expected to be signed next year as the project progresses.

David Gardner, Director of Scottish Hydro Electric Transmission.

“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."

Jonathan Taylor, European Investment Bank Vice President.

“Investment in energy infrastructure across the UK is essential to harness the full potential of new and future renewable energy schemes. "

The bank was happy to support the investment that would 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, he said.

The EIB is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for "sound investment in order to contribute towards EU policy goals."