United States

United States

Danish provide Cape Wind with $600m guarantee

UNITED STATES: Danish credit agency EKF has approved a $600 million loan guarantee to the Cape Wind offshore wind project.

A meteorological mast in place at the site
A meteorological mast in place at the site

This guarantee will help the developer hit its target of financing the $3.6 billion project by the end of the third quarter of the year as planned.

The much-delayed project moved a step closer to financial closure last June, following a $200 million investment commitment from another Danish investor, PensionDanmark.

That loan was conditional on a final investment decision being made by the developer. It is not clear if the EKF guarantee comes with a similar stipulation.

Back in March 2013, Cape Wind agreed to engage the Bank of Tokyo-Mitsubishi UFJ (BTMU) as its coordinating lead arranger of the commercial bank portion of the financing for the project.

Under the terms of the deal, BTMU agreed to provide an unspecified "substantial chunk" of the project's debt.

The up to 468MW project is set to be constructed in Nantucket Sound, Massachusetts, with a provisional commissioning date of 2016.

But there have been a series of delays to previous timescales due to regulatory issues and problems with financing since the project was first muted in 2001.

Cape Wind and Siemens finalised a deal in December that will see the German turbine maker supply 101 of its 3.6MW turbines — in line with the project's signed power purchase agreements — with an option to add another 29 units to bring the facility to its full planned capacity of 468MW.

At the time of the announcement of the turbine purchase, Siemens said that construction had begun at Cape Wind, making the project likely to qualify for the investment tax credit (ITC) subsidy that expired at the end of the year.

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