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Long-Delayed Vineyard Wind Project Secures Financing, Starts Hiring

  • Sep 16, 2021 8:54 am GMT
Financial Services Monitor Worldwide

The hiring and training for onshore and offshore construction of the Vineyard Wind I project can begin in the coming days and weeks now that the Avangrid Renewables and Copenhagen Infrastructure Partners joint venture has secured $2.3 billion to finance its construction.

Vineyard Wind announced Wednesday that its first project, in line to be the nation's first utility-scale offshore wind farm, had reached the financial close milestone and remains on track to bring about 800 megawatts of power online for Massachusetts by the end of 2023.

"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.," Vineyard Wind CEO Lars Pedersen said. "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."

Onshore construction is expected to begin as soon as Thursday in Barnstable, where the power generated by the offshore wind farm is expected to come ashore and connect into the grid, the company said.

"We'll start preparing the onshore substation for where the power will eventually plug into the grid and, in the coming weeks, we'll start preparing the cable going from the sea into that substation," Pedersen told reporters Wednesday afternoon. "So there will be construction work on the Cape, preparing the landfall and also the opening of the roads in coordination with the town of Barnstable who will be doing a sewer project alongside our cabling project. So, immediate action and we're very excited to move forward."

With financing secured, Vineyard Wind plans to issue a notice to proceed to its contractors "in the coming days and weeks," which will allow suppliers to start hiring, training and mobilizing workers. Offshore construction work is expected to begin in 2022.

While numerous industries have seen the time to procure certain items and materials soar as the pandemic disrupted supply chains, Pedersen said Vineyard Wind does not anticipate running into any delays on that front.

"All of this has been contemplated as part of this financial due diligence and been carefully studied," he said.

In July, Vineyard Wind signed a project labor agreement with the Southeastern Massachusetts Building Trades Council to guarantee that at least 500 union workers will have a hand in building the country's first significant offshore wind farm. The project, as well as the 804-MW Mayflower Wind project that is also under contract to deliver power to Massachusetts, will use the New Bedford Marine Commerce Terminal as its primary staging and deployment base.

Avangrid CEO Dennis Arriola said the financial close "demonstrates the financial community's confidence in Vineyard Wind 1 and AVANGRID's sustainability strategy, and more broadly, the U.S. offshore windindustry."

Vineyard Wind said it was advised by Santander and worked with eight other U.S. and international banks to raise the $2.3 billion of senior debt.

Vineyard Wind I, which is expected to include 62 turbines, is planned for 15 miles south of Martha's Vineyard. It was the first offshore wind project selected by Massachusetts utility companies with input from the Baker administration to fulfill part of a 2016 clean energy law.

It is projected to generate cleaner electricity for more than 400,000 homes and businesses in Massachusetts, produce at least 3,600 jobs, reduce costs for Massachusetts ratepayers by an estimated $1.4 billion, and eliminate 1.68 million metric tons of carbon dioxide emissions annually.

The project faces challenges from two federal lawsuits, one brought by the fishing industry and another by those seeking to preserve the endangered North Atlantic right whale. Pedersen on Wednesday said Vineyard Wind never comments on pending litigation, but still responded to a reporter's question about the lawsuits.

"The lawsuits you're mentioning have been reviewed as part of the due diligence process and today we managed to close and nine banks decided to invest alongside use in this project," he said.

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