The Nordlink deal signed by Norwegian and German firms on Tuesday is a joint venture owned by Norwegian state-controlled group Stattnett, Germany's TenneT and KfW IPEX Bank.

With estimated development costs of 1.5 billion euros and 2 billion euros ($1.6 billion to $2.2 billion), the Nordlink project involves building a more than 600-kilometer-long (373 mile-long) power cable connecting Tonstad in southern Norway and Wilster in the northern German state of Schleswig-Holstein.

About 500 km of the cable's route is to run underwater, a joint press statement says.

"This cable will contribute to a climate-friendly and efficient energy system for the future," Stattnett CEO Auke Lont said in a statement.

Project of scale

The cable will have a capacity of 1,400 megawatts, equivalent to the amount of power produced by a nuclear reactor.

"It's one of the largest projects in the European energy sector and will have a great importance for the European energy system," said Markus Scheer, board member of KfW IPEX Bank.

The idea is for Norway and Germany to share electricity generated by the two nations' wind farms.

In the wake of the Fukushima nuclear disaster in Japan, Germany decided to completely phase out atomic energy by 2022 and focus primarily on developing alternative power sources, especially electricity generated from solar and wind energy.

hg/uhe (Reuters, dpa)