Developers of the 800-MW Vineyard Offshore Wind Project said Sept. 15 that they closed on $2.3 billion in senior debt from nine banks, allowing for construction to begin on the first commercial-scale offshore wind farm approved in the United States.
Avangrid Renewables LLC, a subsidiary of Orange, Conn.-based Avangrid Inc., and Copenhagen Infrastructure Partners K/S of Denmark are jointly developing the project off the coast of Martha's Vineyard in Massachusetts. Avangrid's parent company is Iberdrola SA of Spain.
The deal allows for the mobilization of contractors and suppliers. The companies said onshore work will begin in the coming months in Barnstable, Mass., and offshore work will begin in 2022. The project, which is expected to come online in 2023, holds power purchase agreements with electric distribution subsidiaries of National Grid USA, Unitil Corp. and Eversource Energy.
"Today's 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," Dennis Arriola, CEO of Avangrid, said in a news release. "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."
Banks from across the world are financing the project, a reflection of the international makeup of the burgeoning U.S. offshore wind industry.
U.S. institutions Bank of America Corp. and JPMorgan Chase & Co. put up funds, as well as Banco Santander SA subsidiary Santander Bank NA and Banco Bilbao Vizcaya Argentaria SA, both of Spain. Scottish bank NatWest Group PLC got in on the deal; it is majority owned by the Economics and Finance Ministry of the United Kingdom, HM Treasury. Three French banks — Crédit Agricole Group subsidiary Crédit Agricole SA, Groupe BPCE subsidiary Natixis SA and BNP Paribas SA — are also lenders.
Capital came in from Japan as well, by way of Mitsubishi UFJ Financial Group Inc. subsidiary MUFG Bank Ltd.
Norton Rose Fulbright served as lead financing counsel. In addition to investing in the project, Santander also served as an adviser.