NeuConnect, a proposed interconnector project that connects the UK and Germany, has achieved financial close and is expected to begin early works later this year.

The project is being developed by investors including Meridiam, Allianz Capital Partners, and Kansai Electric Power, and entails an investment of €2.8bn.

A consortium comprising more than 20 banks including the EIB, the UK Infrastructure Bank and the Japan Bank for International Cooperation (JBIC), will provide the project financing.

EIB is providing up to €400m for financing the European part.

NeuConnect is the first energy link that connects Germany and the UK and facilitates electricity trade between the European Union (EU) and the UK.

Planned to commence commercial operations in 2028, the interconnector is expected to contribute to the integration of intermittent renewables across the North Sea.

EIB vice-president Ambroise Fayolle said: “This project is ground-breaking for the energy transition, as it makes it possible to use offshore wind energy more efficiently.

“Cross-border electricity trade can help redirect power to where it is most needed, and can thus contribute to the integration of renewables and the stability of the energy supply.”

The project includes a 725km high-voltage direct current (HVDC) link that interconnects England and Germany through German, Dutch and British waters, through a subsea cable.

With a 1,400MW rated capacity and 525kV DC voltage, the interlink will connect converter stations and grid interface in both Germany and the UK.

Siemens has been selected for the converter station contract and Prysmian for manufacturing and installation of the subsea cable.

The interconnector project is said to facilitate better usage of offshore wind capacities on the coasts, and support EU and German renewable energy policies.

In addition, it is expected to reduce CO2 emissions and help Europe achieve its target of reducing at least 55% greenhouse gas emissions by 2030.