Avangrid, CIP Secure USD 1.2 Billion in Capital for Vineyard Wind 1

Business & Finance

October 26, 2023, by Adnan Memija

Denmark-based Copenhagen Infrastructure Partners (CIP) and Avangrid have secured a USD 1.2 billion first-of-its-kind tax equity package for the 800 MW Vineyard Wind 1 offshore wind project in the US.

The investment transaction, which CIP said is the largest single asset tax equity financing and the first for a commercial-scale offshore wind project, was reached with three US-based banks, namely J.P. Morgan Chase, Bank of America, and Wells Fargo.

CCA Group, Santander Corporate & Investment Banking, and Kirkland & Ellis LLP served as financial and legal advisors to Vineyard Wind 1, CIP, and Avangrid.

“Finalizing this tax equity transaction is a critical milestone in executing the financing plan for Vineyard Wind 1. It will allow us to continue financing the project to make it operational,” said Pedro Azagra, Avangrid CEO.

“Closing on a tax equity package has always been a central element to achieving financial success for the first-of-its-kind Vineyard Wind 1. With this investment, Vineyard Wind 1 moves Massachusetts closer to its goal of reducing greenhouse gas emissions by 50% by 2030,” said Tim Evans, partner and Head of North America for CIP.

In 2021, Vineyard Wind, a 50/50 joint venture between Avangrid and CIP, raised USD 2.3 billion of senior debt through nine international and US banks to finance the construction of the offshore wind project.

The wind farm’s offshore construction began in late 2022 while the first steel-in-water was achieved in June this year. A month later, the country’s first offshore substation was installed by DEME’s specialised floating installation vessel Orion.

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Located more than 15 miles off the coast of Massachusetts, Vineyard Wind consists of an array of 62 GE Haliade-X 13 MW wind turbines that will generate 800 MW of electricity and power over 400,000 homes.

Power purchase agreements (PPAs) have already been signed with National Grid, Eversource, and Unitil.

The project is expected to save ratepayers USD 1.4 billion over the first 20 years of operation and to reduce carbon emissions by more than 1.6 million tons per year.