The loan will support nearly £1.2 billion of investment in the network by SHET, including a new 1200 megawatt subsea cable between Spittal in Caithness and Blackhillock in Moray.
The reinforcement is required to improve connections between wind, wave and tidal renewable energy schemes and the grid. The new link will supply equivalent electricity to meet the needs of around 2 million Scottish residents.
The first part of the loan totalling £300 million was signed this week and the remainder is expected to be signed next year as the project progresses.
SHET director David Gardner said: “This project represents the largest investment in the electricity network in the north of Scotland since the hydro development era of the 1950s and we are proud to be an integral part of it.”
The EIB’s vice president Jonathan Taylor said: “The EIB is pleased to provide £500 million to support essential investment by SHET that will ensure more efficient transmission of green energy, enable increased use of renewable power in Scotland and secure energy supply to the Highlands and Scotland’s cities.
“Our strong partnership with SSE over many years demonstrates our firm commitment to support ambitious energy investment that creates jobs and benefits local companies.”
Last month UK Power Networks secured the largest EIB loan by a UK distribution company, receiving an additional £500 million on top of £300 million provided in 2012.
Fellow distribution company Northern Powergrid also secured a £250 million investment over two years from the EIB in February to help fund a £3 billion eight-year upgrade programme of its energy network in the North East.