The EIB will provide £500 million to reinforce connections between wind, wave and tidal renewable energy schemes as well as the national power network.
The new power link will help secure the supply of electricity in the Highlands and once operational, will supply equivalent electricity to meet the needs of around two million Scottish residents.
It includes a new 1,200 megawatt subsea cable between Spittal in Caithness and Blackhillock in Moray.
Around 600 jobs will be created during the subsea cable laying construction phase and associated onshore infrastructure works.
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In addition, the funding will boost SSE's in-house apprentice, trainee engineer and graduate programmes.
The loan will support nearly £1.2 billion of overall investment in the electricity transmission network in Northern Scotland by Scottish Hydro Electric Transmission (SHET).
The first part of the funding (£300m) was signed this week, with the remainder expected to be signed next year as the project progresses.
David Gardner, Director of SHET, said: "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, VP of EIB, added: "Investment in energy infrastructure across the UK is essential to harness the full potential of new and future renewable energy schemes.
"The European Investment Bank is pleased to provide GBP 500 million to support essential investment by Scottish Hydro Electric Transmission plc that will 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."
(LM)
