The European Union’s bank will loan the UK’s National Grid £1.5billion, its biggest ever single loan, the bank said.
The European Investment Bank (EIB) loan will go towards upgrading Britain’s ageing power grid, improving networks and connecting new power generation.
“This represents the largest ever single loan made by Europe’s long-term lending institution,” the EIB said in a statement.
The long-term loan will include capital investment by National Grid to improve infrastructure between the Wirral, Scotland and the London Power Tunnels, the EIB said.
The loan will also go towards improvements to protect critical infrastructure from floods and provide substation capacity needed for new connections to offshore wind farms and new electricity interconnectors to continental Europe.
“Investment in the UK electricity transmission network is essential to prepare for future demand, connect new sources of renewable energy and upgrade old facilities,” said Jonathan Taylor, EIB’s vice president.
The UK has estimated it needs around £110billion of investment to replace ageing fossil fuel and nuclear power stations and prevent power shortages into the 2020s.
