The US Department of Transportation’s (DOT’s) Maritime Administration (MARAD) has designated offshore wind vessels as Vessels of National Interest making them eligible for financial support through the Title XI Federal Ship Financing Program.
This designation will facilitate more offshore wind construction and will prioritize applications for such projects for review and funding through Title XI, DOT said.
The Title XI program assists the domestic shipbuilding industry by providing support for US shipyards to modernize their facilities, to build and retrofit vessels, and to assist US shipowners in cost-effectively purchasing new domestically produced vessels.
It can provide a full faith and credit loan at longer terms and a lower interest rate than traditional private loans. To date, Title XI has provided USD 9.3 billion (EUR 8.85 billion) in loan guarantees.
”From modernizing our ports to investing in the U.S. shipbuilding industry to educating the next generation of mariners who will help advance these wind projects,” said Deputy Transportation Secretary Polly Trottenberg .
”U.S. DOT is helping create both a strong domestic supply chain and a robust U.S. offshore wind industry to help bring costs down for American families and build a clean energy future.”
The Title XI statute was amended in 2019 to add the authority to designate Vessels of National Interest. Such a designation informs and encourages shipbuilders and shipowners that DOT/MARAD will prioritize and expedite applications for loan guarantees for offshore wind-related vessels.
”We’re excited that some American shipyards have already secured contracts to build vessels to service offshore wind developments,” said Maritime Administrator Ann Phillips .
”By growing this industry, we further support essential offshore wind installations, and continue to add jobs and strengthen our important domestic industrial base, including our shipyards and shipbuilding industry.”
This announcement follows the White House meeting with eleven governors from the US East Coast to announce the new Federal-State Offshore Wind Implementation Partnership that will accelerate the growing offshore wind industry. According to the White House, these bold actions have unleashed historic private sector investments to expand an American-made wind energy supply chain.
The partnership will advance the industry’s rapid development and provide more affordable clean energy to all Americans, helping accelerate President Biden’s goal of 30 GW of offshore wind capacity by 2030 and 100 per cent clean electricity by 2035, DOT said.
The approximate subsidy available for Title XI is USD 35.5 million, as of March 2022. Based on the average risk for projects MARAD previously guaranteed this amount of subsidy could support approximately USD 475 million in new loan guarantees.