Dutch power grid operator TenneT has signed a contract for a €150 million (£118.9m) loan to finance a grid project to help connect offshore wind farms in the Netherlands.

It is part of a total €450 million (£356m) loan agreed with the European Investment Bank (EIB) in 2011.

The cash will support the construction of three substations and a 83-kilometre, 380kV link between the towns of Wateringen and Beverwijk, 20-kilometre northwest of Amsterdam.

Pim Van Ballekom, EIB Vice President said: “The Randstad 380 kV transmission loop will both ensure energy supply for most populated parts of the Netherlands and enable North Sea wind to supply customers across north-west Europe.

“Investment in grid infrastructure is essential for energy supply in Europe.”

The Netherlands aims to build offshore wind farms with a total capacity of 3,450MW by 2020.