Ardersier near Inverness aims to become distribution hub for North Sea wind power.
Construction has begun on the redevelopment of Ardersier port near Inverness as a distribution hub for North Sea wind power after a £100mn credit injection from the development banks of Scotland and the UK.
The deal, which marks the first joint funding arrangement between the Scottish National Investment Bank and the UK Infrastructure Bank, follows last year’s investment of £300mn from US private equity firm Quantum Capital Group.
With the world transitioning away from oil and gas, offshore wind presents a big opportunity for the UK economy. The project at Ardersier is one of several aiming to build enough port capacity to service the growing project pipeline.
But the developing sector also faces logistical, financial and bureaucratic problems, from supply chain inflation and a lack of vessels capable of servicing and installing turbines, to limited electricity grid connections and delays in securing regulatory consent.
Lack of port infrastructure threatens Scotland’s offshore wind boom
“This is a nascent industry, in which the UK is going first and fastest, so I would call this now a phase of forming,” said Gillies. “Confidence will grow as each project progresses — there isn’t a challenge that can’t be overcome.”
A chronic shortage of housing in the rural north of Scotland posed another problem for developments such as Ardesier, he said.
Mark Munro, SNIB’s chief investment officer, said that in addition to helping fund the expansion of the Port of Aberdeen, the investment bank was focusing on housing as regeneration around renewable energy prompts a surge in demand for new accommodation.
The financing marks the first joint transaction between the two state-owned development banks, which can take on more risk than their commercial counterparts to deliver nationally significant infrastructure, such as the port.
SNIB, formed in 2020, has a mandate to fund net zero carbon emission projects, innovation and areas suffering depopulation, such as the Highlands.