NEW YORK -- Cape Wind Associates LLC received a conditional $150 million loan guarantee from the U.S. Department of Energy for its project off the coast of Massachusetts.
Cape Wind will receive the loan guarantee after securing the balance of an estimated $2.6 billion in project financing, with about a quarter of the funding coming from the sale of equity, said Peter Davidson, director of the department’s loans program. It would be the first utility-scale wind farm in U.S. waters.
“The developer puts the rest of the deal together, lining up the rest of the debt capital and equity capital,” Davidson said yesterday in a telephone interview. “When they come back to get the loan guarantee at the end, we go through a checklist. All the conditions have to be met.”
Cape Wind applied a few years ago for federal support of its wind farm, and after more than a decade sparring with opposition including environmental groups and local fishermen, the project gained traction after a March court ruling, Davidson said.
The U.S. in 2010 awarded a lease to Cape Wind for an area 5 miles (8 kilometers) off Cape Cod that covers about 25 square miles. EKF, Denmark’s export credit agency, pledged a $600 million loan guarantee in February.
“All the pieces are falling into place,” Davidson said. “It’s important to demonstrate that new technologies are viable to commercial banks and lenders.”
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Lead image: Wind turbine via Shutterstock