The European Investment Bank (EIB) is supporting the development of a hydropower project in Austria with a €280 million (£221.9m) loan.
The 360MW Obervermuntwerk II pumped storage power plant in the Vorarlberg region is expected to help reduce network losses and boost grid reliability.
The loan will also finance the construction of a smaller 13MW plant and substation, with completion scheduled for 2018.
EIB Vice-President Wilhelm Molterer, who is responsible for the Bank’s financing operations in Austria, said: “Obervermuntwerk II will play a key role in generating environmentally friendly power. It will also make an important contribution to ensuring the stability and reliability of the whole European power grid.”