Power

Vineyard Wind achieves financial close and gets ready for construction

Vineyard Wind

Vineyard Wind, the United States’ first offshore wind farm, has reached financial close this Wednesday after nine banks invested up to $2,3 billion in the project. The milestone would allow Avangrid Renewables and Copenhagen Infrastructure Partners to proceed with its construction.

According to the companies’ statement, achieving financial close is a true milestone not just for the developers but for the U.S. as a whole. Funds will allow suppliers to start hiring, training, and mobilizing people to prepare for both on and offshore construction.

Reuters reports, after a conference call with developers, that onshore construction activities will start almost immediately. In contrast, offshore construction activities will begin in 2022. Lars Pedersen, chief executive of Vineyard Wind, said. “Construction will start as soon as tomorrow on a Barnstable, Massachusetts substation. There, undersea cables will connect to the power grid onshore.”

Moreover, around 2023, the first phase of the Vineyard Wind project will be operational. Vineyard Wind project 1 will have a total capacity of 800 megawatts. As outlined above, it will be the first commercial-scale offshore wind project in the United States.

In addition, it will generate electricity for more than 400,000 homes and businesses in the Commonwealth of Massachusetts. It will also save ratepayers $1.4 billion over the first 20 years of operation. Its emissions-free electricity output will also reduce carbon emissions by more than 1.6 million tons per year.

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Nine banks invested in Vineyard Wind

According to Reuters, the project will cost around $3 billion in total. Pedersen also noted during the conference that they expect to raise more financing in later stages of development. The project then would be eligible for a federal clean energy tax credit.

On the other hand, the banks involved in the current financial closing were: Bank of America, J.P. Morgan, BBVA, NatWest, Santander; also, Crédit Agricole, Natixis, BNP Paribas and MUFG Bank. Furthermore, the project’s lead financing counsel was Norton Rose Fulbright.

Dennis V. Arriola, CEO of AVANGRID said. “We are proud to pioneer this new industry and demonstrate that offshore wind can be a sound investment, while creating jobs, combating climate change and powering the economies of our coastal communities.”

Finally, Christian T. Skakkebæk, a Senior Partner and Co-founder of CIP concluded. “There is potential here for tremendous growth and investment, both in the industry and the supply chain. I’ve no doubt that this important milestone is just the beginning.”

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