AVANGRID’s $2.3B Vineyard Wind 1 offshore wind joint venture reaches financial close

Massachusetts will be home to the first commercial-scale offshore wind project in the United States after the owners of Vineyard Wind 1 closed on a $2.3 billion loan, AVANGRID Inc. announced this week.

The project, a joint venture between AVANGRID’s subsidiary Avangrid Renewables and Copenhagen Infrastructure Partners, recently closed on a $2.3 billion construction and term loan debt financing with nine global banks. That means the 800-megawatt (MW) project can commence construction this fall in order to begin delivering clean electricity to Massachusetts in 2023.

“Today’s milestone demonstrates the financial community’s confidence in Vineyard Wind 1 and Avangrid’s sustainability strategy, and more broadly, the U.S. offshore wind industry,” Dennis Arriola, CEO of AVANGRID, said. “We are proud to pioneer this new industry and demonstrate that offshore wind can be a sound investment, while creating jobs, combating climate change and powering the economies of our coastal communities.”

Vineyard Wind 1 has received all necessary permits and has now entered into a Project Labor Agreement with the Massachusetts Building Trades for construction.

Located 15 miles off the coast of Martha’s Vineyard, Vineyard Wind 1 will consist of an array of 62 wind turbines, spaced 1 nautical mile apart. Vineyard Wind 1 is expected to provide enough electricity to power more than 400,000 homes in Massachusetts and reduce electricity rates by approximately $1.4 billion over the first 20 years of operation. It will reduce carbon emissions by more than 1.6 million metric tons per year.

“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,” said Lars T. Pedersen, CEO of Vineyard Wind, the off-shore wind development company.

On Thursday, Vineyard Wind said it submitted two proposals in response to the Request for Proposals for offshore wind energy projects in Massachusetts. Specifically, the “Commonwealth Wind” proposals offer options of approximately 800 MW and 1,200 MWs of clean energy, and the project would be developed in an area just south of the company’s Vineyard Wind 1 project.

“Commonwealth Wind builds on our strong track record of successfully developing and financing offshore wind projects to deliver clean energy to Massachusetts,” said Bill White, head of U.S. Offshore Wind for Avangrid Renewables. “We look forward to working with community leaders across the Commonwealth to create good paying jobs, continue addressing the urgent climate challenge, and bring transformational investments across the state.”

Avangrid Renewables is also a partner on Park City Wind, an 804 MW project that will serve the state of Connecticut, as well as on additional lease areas off the coast of Massachusetts and Rhode Island. In addition, Avangrid Renewables is developing Kitty Hawk Offshore Wind that has the potential to deliver 2,500 MW of clean energy into Virginia and North Carolina.