Cape Wind wins approval for $600M loan

Source: Elizabeth Harball, E&E reporter • Posted: Friday, February 28, 2014

BOSTON — The proposed Cape Wind offshore wind farm in Massachusetts’ Nantucket Sound moved another step toward realization yesterday, announcing that it has received approval for a significant chunk of financial backing needed for construction of the project, which is estimated at $2.6 billion.
In a speech to Offshore Wind Power USA conference attendees, Cape Wind President Jim Gordon yesterday said the initiative has received a $600 million loan from EKF, Denmark’s official export credit agency.”This is allowing us, with our other banking partners … to move this project forward,” Gordon said. “It’s important that we get these projects done; it’s important that we show that we can put steel in the water to really reach the full potential of this industry.”

Gordon added he was hopeful that Cape Wind would complete financing in the third quarter of this year.

EKF has backed several offshore wind projects in the past, including Belgium’s 216-megawatt NorthWind project and the 120 MW Princess Amalia project off the Netherlands’ shores.

Opponents are undeterred

According to Cape Wind spokesman Mark Rodgers, this loan is in addition to $200 million commitment from Copenhagen Infrastructure Partners, a $100 million equity stake from Siemens AG, and additional backing from the Bank of Tokyo-Mitsubishi, which will serve as the lead arranger of commercial debt and will also provide commercial debt, although Rodgers would not disclose the total amount at this point.

Rodgers also reiterated that Cape Wind had qualified for the lucrative federal investment tax credit, which expired at the end of 2013.

Cape Wind opponent Audra Parker, president and CEO of the Alliance to Protect Nantucket Sound, was undeterred by yesterday’s announcement, saying in a statement that it “is another example of Cape Wind’s reliance on conditional foreign investments.”

“The high priced and controversial project has yet to receive any U.S. financing or obtain a critical loan guarantee from the U.S. Department of Energy,” Parker said.

In the same week that it lost a legal challenge surrounding the project’s risks to aviation in federal court, the alliance filed a new lawsuit against Cape Wind this January, challenging the legality of its power purchase agreement with the utility NStar.

But offshore wind advocate Catherine Bowes, head of the National Wildlife Federation’s New Energy Solutions initiative, said the funding announcement is an “encouraging sign” for Cape Wind’s future, serving as proof that offshore wind investors are “not deterred by this continued frivolous legislation.”