Vineyard Wind, a joint venture between Avangrid Renewables subsidiary and Copenhagen Infrastructure Partners (CIP), has achieved financial close for the company’s first project. Working with nine international and U.S.-based banks, $2.3 billion of senior debt has been raised to finance the construction of the project.
The milestone enables Vineyard Wind to provide a notice to proceed to its contractors in the coming days and weeks, allowing suppliers to start hiring, training and mobilizing people to prepare for both on and offshore construction. Onshore work will begin this fall in Barnstable, with offshore work commencing in 2022. The first power from Vineyard Wind 1 will be delivered to the grid in 2023.
“There have been many milestones passed over the last several months, from securing the final federal permits to signing the U.S.’s first offshore wind project labor agreement,” says Vineyard Wind CEO Lars T. Pedersen. “Achieving financial close is the most important of all milestones because today we finally move from talking about offshore wind to delivering offshore wind at scale in the U.S.”
“With the signing of these agreements, we now have everything in place to start construction, launching an industry that will immediately start to create jobs and make a significant contribution to meet Massachusetts’ carbon pollution reduction targets,” adds Pedersen. “We couldn’t have made it this far without the tremendous support we’ve received from local residents, elected officials at every level of government and so many others.”
“This milestone demonstrates the financial community’s confidence in Vineyard Wind 1 and AVANGRID’s sustainability strategy, and, more broadly, the U.S. offshore wind industry,” states Dennis V. Arriola, CEO of AVANGRID. “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.”
“We’ve long believed in the financial viability of this project, and this announcement is an absolute confirmation of that outlook,” comments Christian T. Skakkebæk, a senior partner and co-founder of CIP. “Together with our contractors and suppliers, we can now move forward with construction and start creating the first of many offshore wind jobs in the U.S.”
Advised by Santander, the nearly $2.3 billion of senior debt also includes investments from nine banks, including Bank of America, J.P. Morgan, BBVA, NatWest, Santander, Crédit Agricole, Natixis, BNP Paribas and MUFG Bank. The project’s lead financing counsel was Norton Rose Fulbright. The effort for Vineyard Wind was led by the company’s General Counsel, Jennifer Simon Lento.
Vineyard Wind 1 is an 800 MW project located 15 miles off the coast of Martha’s Vineyard. It will be the first commercial scale offshore wind project in the U.S. The project will generate electricity for more than 400,000 homes and businesses in the Commonwealth of Massachusetts, save ratepayers $1.4 billion over the first 20 years of operation and is expected to reduce carbon emissions by more than 1.6 million tons per year.