The Cape Wind offshore wind project off the USA's eastern seaboard is on track to complete financial close this year after securing $200 million of investment from PensionDanmark, one of Denmark's largest pension fund firms.
The investment is a milestone for the proposed 454 MW project, which will be the first offshore wind project in the USA and which has suffered numerous delays caused by entrenched opposition from the anti-wind lobby.
The $2.6 billion project is scheduled to complete financial close by the end of 2013. PensionDanmark has pledged $200 million in capital for the project via the Copenhagen Infrastructure I fund, which is managed by Copenhagen Infrastructure Partners (CIP).
PensionDanmark says that Cape Wind is crucial to advancing the USA's offshore wind sector. "Investing in energy infrastructure is not new to us," said Torben Möger Pedersen, CEO of PensionDanmark. "We have made equity investments in two offshore wind farms in Denmark and three onshore wind farms in the USA and provided debt financing for onshore wind parks in Sweden and Belgium.
"At a time when bond yields are very low, this is expected to be an attractive investment opportunity for us."
With up to 130 Siemens turbines of 3.6 MW each, Cape Wind could become one of the world's large offshore wind farms. The first season of the project, in which the investment is expected, covers 101 of the turbines.
PensionDanmark's commitment is conditional upon a final investment decision to be made by the end of the year.
"The Cape Wind project has some attractive project characteristics in terms of the physical conditions of the site and an experienced supplier base, and we expect the final project details to be in place later this year," said Christian Skakkebæk, who is a partner in CIP.
Power purchase agreements have been secured covering the production of the first phase of the project for 15 years and the project has also received consent for construction.
Cape Wind will be located in Nantucket Sound off the coast of Massachusetts. Critics of the projects say that the installation of the turbines and cables will harm the marine environment as well as result in increased electricity prices.
Cape Wind is scheduled to start operating in 2015. Energy utilities National Grid and NSTAR have committed to buy power from the wind farm at ¢20/kWh.
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