Vineyard Wind raises $2.3 billion, readies to start construction

Lars T. Pedersen, CEO of Vineyard Wind: “We have used all of our experience with our existing portfolio to put together an incredibly strong proposal.”

Vineyard Wind, a joint venture between Avangrid Renewables, a subsidiary of AVANGRID, Inc. (NYSE: AGR), and Copenhagen Infrastructure Partners (CIP), reports that its first project has achieved financial close. Working with nine international and U.S. based banks, $2.3 billion of senior debt has been raised to the construction of the project. The milestone enables Vineyard Wind to provide a notice to proceed to its contractors in the coming days and weeks, allowing suppliers to start hiring, training and mobilizing people to prepare for both on and offshore construction.

The announcement came within days of news that a fishing industry group had filed a legal challenge to the Secretary of the Interior’s July 15, 2021 decision approving the Vineyard Wind 1 project.

With financing now in place, onshore work will begin this fall, with offshore work commencing in 2022. The first power from Vineyard Wind 1 will be delivered to the grid in 2023.

“There have been many milestones passed over the last several months, from securing the final federal permits to signing the U.S.’s first offshore wind project labor agreement,” said Vineyard Wind CEO Lars T. Pedersen. “Achieving financial close is the most important of all milestones because today we finally move from talking about offshore wind to delivering offshore wind at scale in the U.S. With the signing of these agreements, we now have everything in place to start construction, launching an industry that will immediately start to create jobs and make a significant contribution to meet Massachusetts’ carbon pollution reduction targets. We couldn’t have made it this far without the tremendous support we’ve received from local residents, elected officials at every level of government and so many others. We can’t thank you enough and look forward to working together for many years to come.”

“This is a critical step for the creation of a domestic supply chain as U.S. businesses will now watch this industry come to life before their eyes,” commented Liz Burdock, president & CEO of the Business Network for Offshore Wind, “Offshore wind will tap into American manufacturing capability, engineering expertise, and skilled labor to build a brand-new industry that grows local economies while helping the nation achieve its renewable energy goals. Vineyard Wind’s financial closure means contracts will now begin flowing to local businesses sparking investment and job creation. Now is the time for U.S. businesses to get themselves trained and networked so they can successfully join the growing supply chain and help build this new industry. It is imperative we support these businesses and work to localize a supply chain ensuring we can achieve our ambitious renewable energy goals.”

Advised by Santander, the nearly $2.3 billion of senior debt also includes investments from nine banks, including Bank of America, J.P. Morgan, BBVA, NatWest, Santander, Crédit Agricole, Natixis, BNP Paribas and MUFG Bank. The project’s lead financing counsel was Norton Rose Fulbright. The effort for Vineyard Wind was led by the company’s General Counsel, Jennifer Simon Lento.

Vineyard Wind 1 is an 800 MW project located 15 miles off the coast of Martha’s Vineyard and will be the first commercial scale offshore wind project in the United States. The project will generate electricity for more than 400,000 homes and businesses in the Commonwealth of Massachusetts, save ratepayers $1.4 billion over the first 20 years of operation and is expected to reduce carbon emissions by more than 1.6 million tons per year.