£100 million growth deal to support energy transition of Scottish islands

The leaders of the three Scottish island councils recently welcomed the Scottish and UK governments’ award of £100 million in funding as part of the Islands Growth Deal.


The money goes to Orkney, Shetland and the Western Isles.

The multimillion pound deal will provide investment for local projects across the Scottish islands, driving sustainable economic recovery and growth, creating jobs and attracting further private and public sector investment.

It will target a range of areas, including tourism, infrastructure, innovation, skills, energy transition, and renewable energy systems.

Discussions will now continue towards agreeing a Heads of Terms along with more detail on funding the transformational projects.

In a joint statement, Councillors Roddie Mackay, James Stockan and Steven Coutts, Leaders of the Western Isles, Orkney and Shetland respectively, said the deal has the potential to transform the islands:

“We presented the UK and Scottish governments with a serious and ambitious set of proposals which reflected both the scale of our economic opportunities as well as the support required to create a sustainable future for our islands.

We made our case, and throughout the process we felt both governments understood and recognised the opportunities our islands offer.”

The island councils worked with a wide range of business, academic, research and public sector partners in developing their Islands Growth Deal proposals.

To mark the announcement, Prime Minister Boris Johnson and Scottish Secretary Alister Jack visited Orkney last week meeting with local sector representatives.

EMEC Orkney

EMEC’s managing director, Neil Kermode, met with Prime Minister Boris Johnson during his visit:

“The Prime Minister was genuinely engaged during our meeting today, and summed up the opportunities and challenges we put to him very thoroughly. We discussed Orkney’s role as a living laboratory for decarbonisation through renewables and sustainable development, providing an overview of some of the innovative projects around hydrogen, zero carbon shipping and aviation, wave and tidal energy technologies, and integrated energy systems.

“He appreciated the need for national recognition of Orkney’s achievements to date, and the support needed for the UK to build back greener.

We requested a mandate to enable us to move faster to help our communities develop sustainably, and address the need for flexibility in regulations that work for our future prosperity rather than getting stuck in archaic rules developed for the outdated ways of the past.

I’m looking forward to continuing these discussions with his government over the coming months.”

Regional Growth Deals are agreements between the Scottish Government, the UK Government and local government aiming to bring about long-term strategic approaches to improving regional economies.

This deal does not cover all Scotland’s 96 inhabited islands as many of the islands are already covered by other regional growth deals.