Cape Wind has secured another financial partner in the company’s attempt to build a 130-turbine wind farm in Nantucket Sound.
In a statement released today the offshore wind energy developer announced that, together with The Bank of Tokyo-Mitsubishi UFJ, Ltd., it had added Natixis and Rabobank as the project’s “lead arrangers” which are responsible for organizing a syndicate of commercial banks to provide debt financing for the project.
The banks are also expected to make significant financial commitments of their own to the project which, combined with a $600 million from a Danish credit agency, would total $1 billion, according to the announcement.
Between the three banks they are expecting to provide more than $400 million in debt, according to Cape Wind spokesman Mark Rodgers.
“This is one of the key steps in completing the financing package for the construction of the Cape Wind project,” Theodore Roosevelt IV, managing director at Barclays, Cape Wind’s financial advisor said in the statement.
There is considerable interest from other commercial banks and the package of commercial debt is expected to be complete in the near future, according to Bank of Tokyo-Mitsubishi project finance director Takaki Sakai.
Natixis is part of Groupe BPCE, the second largest banking group in France, and has helped finance offshore wind projects in Netherlands and Germany, according to the announcement.
Netherlands-based Rabobankis has financed offshore wind projects in the Netherlands, Belgium, Germany and the United Kingdom.
In addition, PensionDanmark announced in June that it would invest $200 million in Cape Wind.
In December, Cape Wind signed a deal with Siemens to build the project’s turbines and an electric service platform to convert its power for transmission. Simens has also offered to provide a $100 million investment for the project.
The developer has also applied for a $500 million Department of Energy loan guarantee but the status of the application is unclear. Energy Department officials have declined to comment on the status of the application.
Estimates based on Cape Wind’s filings with state regulators put the project’s total cost at $2.6 billion.
“We’re pursuing additional equity investors working with Barclays as our financial advisors,” Rodgers said.
Cape Wind also expects to qualify for tax credits that would keep the cost of the project from rising, he said.
Cape Wind still faces opposition, including an outstanding lawsuit challenging a contract between the company and NStar for the purchase of a portion of the project’s power. Earlier this year a U.S. Court of Appeals denied a petition by wind-farm opponents appealing the Federal Aviation Administration’s approval of the wind farm.
On March 14 a federal judge denied a list of challenges that were originally part of four lawsuits challenging the project’s approval by the Department of Interior. Opponents, however, claimed victories on two claims, which the judge said would need to be remanded to federal agencies for further action.
Cape Wind and its supporters said they did not expect those decisions to hold up the project.
The company will begin construction after closing financing, starting with onshore cable route construction by the end of 2014 and ocean-based construction by 2015, according to today’s announcement.
Cape Wind expects to begin commercial operations in late summer 2016. The project was originally proposed in 2001.
Opponents, led by the Alliance to Protect Nantucket Sound, say they plan to continue to fight the project and that it will never be built.