The European Investment Bank (EIB) has agreed to provide a loan of £250m to support Northern Powergrid in refurbishing the power network in the North East, Yorkshire and northern Lincolnshire.
Northern Powergrid (Yorkshire) and Northern Powergrid (Northeast) will use the loan over two years to upgrade the regional power network in order to lower power cuts.
The refurbishment will deliver additional capacity for future customers and safeguard the network from harsh weather conditions.
The loan will support Northern Powergrid’s £3bn, eight-year investment programme to strengthen the region’s power network, enhance reliability for customers, support economic growth, and address future low-carbon challenges.
Plans under the programme include improving connections to 900MW of renewable energy resources such as onshore and offshore windfarms and solar power schemes, and the undergrounding of 100km of overhead power lines in protected landscape areas.
Northern Powergrid manages more than 60,000 substations and 91,000km of overhead power lines and underground cables.
EIB vice-president Jonathan Taylor said: "Investment in UK energy infrastructure is essential to upgrade equipment, ensure supply and expand innovative services.
"The European Investment Bank recognises the importance of ambitious investment being carried out by regional power companies and is pleased to provide a loan of £250m to support Northern Powergrid’s wider investment programme through one of our largest ever loans for energy distribution in the United Kingdom."
The EIB has provided more than £10bn for investment in the UK energy sector over the past ten years.
The bank’s financing was used in renewable energy projects, national transmission networks and regional power distribution, and interconnectors to Ireland and continental Europe.