Cape Wind said Wednesday several financial companies have committed to providing $400 million to help finance the offshore wind project slated to be built in Nantucket Sound. That means Cape Wind has raised $1.3 billion, roughly half of the project’s estimated $2.5 billion cost.
The latest chunk comes from Natixis, a French investment management company; Dutch bank Rabobank; and The Bank of Tokyo-Mitsubishi UJF Ltd. The three firms are the lead arrangers for Cape Wind, meaning they will provide financing for some of the debt and bring in other investors to finance the rest.
“This is one of the key steps in completing the financing package for the construction of the Cape Wind Project,” said Ted Roosevelt IV, managing director at Barclays, the wind farm’s financial adviser.
Cape Wind has revealed several financing and construction deals in the last few months. It signed contracts with two companies earlier this month for the cables needed to transport power generated by the 130-turbine wind farm. And in late February the company said it had secured a $600 million loan from the Danish Export Credit Agency, EKF.
In December, Cape Wind completed a deal to purchase turbines for the project from a Siemens subsidiary.
“We are pleased that these experienced offshore wind lenders are supporting our efforts to diversify our region’s energy mix and helping to launch the US offshore wind industry,” Jim Gordon, president of Cape Wind, said in a statement.
The project’s large price tag could be offset by a federal tax credit, for which Cape Wind expects to qualify. The credit would cover 30 percent of Cape Wind’s capital costs.
The controversial offshore wind farm has been in the works for more than a decade, held up by a long permitting process and legal appeals from a variety of groups, including the Alliance to Protect Nantucket Sound.
On Wednesday that group’s president, Audra Parker, questioned the financing Cape Wind has gathered, saying it “does little to change the numerous challenges that Cape Wind continues to face in its 13-year struggle.”
Parker said the project has several deadlines to meet, including starting construction by 2015, to meet the terms of Cape Wind’s power contracts with utilities. With legal cases pending, she said, meeting those deadlines is going to be difficult.
One of the hurdles: a suit recently filed by Parker’s group challenging a contract under which the Boston utility NStar agreed to purchase a portion of Cape Wind’s power for a starting price of 18.7 cents per kilowatt hour, well above typical wholesale prices. The deal was brokered by Massachusetts officials, and Parker’s group contends it discriminates against out-of-state power companies.