Cape Wind has signed a term sheet to engage the Bank of Tokyo-Mitsubishi UFJ (BTMU) as its coordinating lead arranger of the commercial bank portion of the total debt financing for the project, proposed to be built in the Nantucket Sound off the coast of Massachusetts.
Under the terms of the deal, BTMU has agreed to provide a substantial chunk of the project's debt and coordinate the involvement of other commercial banks potentially lending to the project.
Cape Wind expects to complete project financing and begin construction by the end of the year.
"Obtaining financing is one of the last steps to complete before proceeding with the construction of the project," said Jim Gordon, president of Cape Wind. "Together with BTMU, we are engaging a group of experienced financial institutions as our core banking group and look forward to completing the financing of America's first offshore wind farm, which will deliver significant environmental, energy and economic benefits to Massachusetts and the surrounding region."
Barclays Bank is Cape Wind's sole financial adviser and will continue to advise Cape Wind on raising the remaining financing needed.
The project has so far sold 77.5% of its output via power purchase agreements (PPAs), the latest deal being a 15-year agreement signed with N-Star in November 2012 for 27.5% of its output. A PPA with National Grid covers the remaining 50%.