Swedish state-owned energy company Vattenfall will build a £320 million wind farm in Scotland after a deal with infrastructure fund Greencoat, the two firms said.

The South Kyle site, which is halfway between Glasgow and Dumfries, will supply enough electricity for around 170,000 homes when it opens in the first quarter of 2023.

Vattenfall will install 50 turbines and supply 235 megawatts (MW) of power tothe grid. It already has permission.

Vattenfall's head of wind Gunnar Groebler said: "South Kyle will significantlycontribute to the renewable energy production in Scotland."

The new wind farm will pump around £38 million into local schemes through its community benefit programme over its lifetime, bosses said.

Credit: PA

Vattenfall chief executive Magnus Hall said: "The planned construction of theSouth Kyle Wind Farm shows our commitment to the United Kingdom and itstransition to climate neutrality, as well as delivering on Vattenfall's goal toenable fossil-free living within one generation."

However, construction at the site may have to wait until there is more clarityon the coronavirus lockdown, bosses said.

"Construction of the wind farm will begin once it is appropriate to do so.Therefore, a timeline for construction is yet to be confirmed," Vattenfallsaid.

The new buy adds to Greencoat's portfolio of 36 operating wind farms across the UK, with almost one gigawatt of generating capacity.

Laurence Fumagalli, of Greencoat Capital, said: "We are pleased with thetransaction, which will bring a large-scale, subsidy-free wind farm under our ownership."

Greencoat will pay Vattenfall £320 million to build the site, and run it for adecade.

"We are delighted to enter into an agreement with Vattenfall, our fifth majorutility partner," said Greencoat's Tim Ingram.