A POTENTIAL £87 million cash injection to help finance the £1.7b Hunterston cable manufacturing project has been announced today.

The UK Infrastructure Bank (UKIB) has revealed an investment in subsea HVDC cable manufacturer XLCC to develop the new world-leading factory in North Ayrshire.

The funding consists of an initial £20m from the UKIB with an option to invest a further £67m upon XLCC achieving specific development and funding milestones.

The investment demonstrates the bank’s commitment to working with private investors to support the government’s clean energy mission to make the UK a clean energy superpower and accelerate to net zero, UKIB say.

Strengthening homegrown supplies of components and parts, that are essential for net zero such as HVDC cable, is said to be fundamental to achieving that mission.

The bank’s financing will help XLCC develop its factory, which, once completed, will have capacity to produce thousands of kilometres each year of leading edge HVDC cable.

The commitment is complemented by additional investment from existing and new investors. This is incremental to the funding of more than £40m raised by the company to date, to design the product, complete detailed design activities for the factory and to achieve full planning permission at the site.

The project is firmly in line with the bank’s twin missions to help tackle climate change and support regional and local economic growth.

Once complete the Hunterston factory will create around 900 permanent jobs including more than 200 apprenticeships.

This week, the XLCC training centre opened in Arkwright Way in Irvine to benefit local apprenticeships.

Subsea HVDC cables built at Hunterston will be capable of transporting energy over long distances with significantly increased efficiency.

As such, they will play a 'fundamental role in the upgrade of the grid required for the energy transition'.

This will enable the connection of renewables at scale and allow the clean energy produced by wind farms in the North Sea to be transported to homes and businesses around the country – strengthening energy security and supporting decarbonisation.

Industry regulator Ofgem has welcomed the bank’s involvement to enable the critical infrastructure required to deliver the vital grid projects.

John Flint, UK Infrastructure Bank’s CEO, said:  “Industry projections indicate that demand for subsea cables will soon exceed existing supply chain capacity.

"Our support for XLCC is intended to provide confidence to the market, and boost production capacity in an industry set to have a significant impact on the UK‘s transition to net zero.”

Ian Douglas, XLCC’s CEO, said:  “XLCC's mission is to provide critical elements of the infrastructure that is essential to the energy transition and will reduce project costs to the benefit of the UK consumer.

"The creation of the Hunterston facility brings significant investment to the UK, creating highly skilled jobs in advanced manufacturing and project management for decades to come. We welcome the foresight of UKIB and our other investors.”

Jonathan Brearley, Ofgem CEO, said:  “Britain is seeing the biggest transformation of the energy grid for decades. It will have long-term benefits for us all – true energy security, cutting emissions and protecting consumers."