BUSINESS in the south of Scotland is to receive a major boost with the creation of an enterprise agency for the region.

The new body, which has yet to be named, aims to stimulate the economy of Dumfries and Galloway, the Borders, and other southern areas in the same way that Highland and Islands Enterprise has helped generate growth in northern areas.

Announced by Economy Secretary Keith Brown yesterday, the measure is included in the final report from the Scottish Government’s enterprise and skills review and recognises the region’s “distinctive” needs.

The paper also outlines plans for a £500,000 fund to support colleges to work with businesses on innovation activity, a new skills planning model, and closer working with the private sector.

“Better coordination” of international efforts to benefit trade and investment is also planned.

On a visit to renewables firm Kite Power Systems (KPS), which is pioneering a new form of electricity generation for Scotland, Brown said: “We can transform the performance of our economy and enable more businesses to deliver strong, vibrant and inclusive growth at scale.

“From better co-ordination of our international activity to ensuring young people are equipped with the skills they need to succeed, this review has delivered a package of reforms that will drive change across the country.

“We have recognised the importance of providing dedicated support to the south of Scotland in the same way we currently do for the Highlands and Islands.

“A new agency will be established to meet the distinctive economic needs of communities in the south of Scotland.

“We are putting a greater urgency behind our innovation action plan and joining up the efforts of our skills agencies to help learners and businesses get the training they need.

“Businesses will benefit from streamlined innovation support through a new digital access point, building on the recent success that has seen Scotland move into the top group of EU nations as regards innovation performance.

“The fundamentals of Scotland’s economy are strong and – as this report confirms – we are doing all that we can to build upon these further.”

With £7 million of equity funding secured, KPS has been given planning consent to deploy a 500kW power system at West Freugh, near Stranraer.

The first of its kind in the country, its system uses two kites to turn spool drums.

Moving in a figure-of-eight pattern, the kites fly to a maximum height of 1,500ft, with one rising as the other falls to ensure the turbine they power creates a near-constant flow of electricity.

Testing of a 500kw system will begin within weeks, following work on a smaller 40kw scheme, and £2m of the company’s equity funding came from the Scottish Investment Bank (SIB), part of Scottish Enterprise, with the rest provided by international investors.

Its team of 20 staff is expected to grow to 34 by the end of the year and David Ainsworth, KPS business development director, said: “This very welcome new investment from the SIB is an endorsement of the extensive research and development work the KPS team has carried out and is a further vote of confidence in our technology and our business.

“With the support of our other investors, this backing will accelerate KPS’s commercial development plans towards deploying lower cost, deep-water offshore wind energy on a global scale.”