More than 200 jobs will be created through the development of a new deep water terminal in the Outer Hebrides.
Initial work will begin on the Stornoway Deep Water Terminal next summer, with a planned opening in May 2023.
The £49m investment comes from a number of partners, aiming to strengthen transport links and support a range of industries in the Western Isles.
The project includes a facility for berthing for cruise ships up to 360 metres long, a new deep water berth to cater for larger cargo vessels, and a freight ferry berth; berthing and unloading facilities for renewable energy components and development land for a range of uses such as industrial processes and decommissioning.
Rural economy secretary Fergus Ewing MSP said: “This transformational project, which will put Stornoway in pole position to take advantage of emerging technologies such as hydrogen, is the culmination of dedicated partnership working between local partners, Highlands and Islands Enterprise (HIE), Comhairle nan Eilean Siar and the Scottish Government to create a development of real value to communities.
“This is a great example of the blue economy in action, as it is creating infrastructure in our islands which can benefit a range of marine industries and coastal communities, helping Scotland build back better from the pandemic and make the transition to net zero through the creation of a stronger, more resilient, sustainable economy.”
Comhairle nan Eilean Siar leader, councillor Roddie Mackay, said: “This investment is the first step in a comprehensive vision for the redevelopment of Stornoway and the ancillary facilities around the Port.
“Our ambition is that the Deep Water Terminal will be a driver and catalyst for a series of new activities such as the creation of a hydrogen-driven energy hub and as a future base for renewable energy deployments west of the Hebrides.”
Alistair Dodds, chair of HIE, added: “The benefits of this development will be far reaching. It will strengthen transport links between the islands and the mainland. It will significantly enhance the islands’ potential in terms of the developing marine economy, which includes renewable energy, oil and gas decommissioning and tourism, and it will create many valuable local jobs.
“This in turn will help attract more people and business to the islands, stimulate wider economic activity and strengthen community resilience.”
The capital cost breaks down into a HIE grant of £10m, a financing facility from Comhairle nan Eilean Siar of £37.5m to Stornoway Port Authority, and cash reserves of £1.5m from Stornoway Port Authority for the remainder.
The government is supporting the project through the Growth Accelerator mechanism which will release revenue payments to Stornoway Port Authority based on the achievement of a series of outcomes over the life of the project.
The agreed outcomes are cruise passenger numbers; gross vessel tonnage; number of people completing training programmes for associated jobs and opening of the deep water berth by May 2023.
Phase 1 of the deep-water terminal is part of the Stornoway Port Authority’s 20-year masterplan.
Stornoway Port Authority will now progress the initial stage in the tender process. Following the pre-qualification questionnaire process, the tender is expected to be published late February and construction is expected to commence in late summer 2021.