BOSTON – Cape Wind, the company behind a planned 468-megawatt offshore wind farm in Nantucket Sound, announced Tuesday that it is one step closer to starting construction.
The company said it has signed a term sheet engaging The Bank of Tokyo-Mitsubishi UFJ as its coordinating lead arranger of the commercial bank portion of the project’s total debt.
The announcement comes a month after Cape Wind President Jim Gordon said his company planned to select BTMU for this role.
Under the agreement, the bank will provide debt capital to fund the project’s development and construction.
According a release issued by the company, Cape Wind expects to complete project financing and begin construction by the end of the year.
“Obtaining financing is one of the last steps to complete before proceeding with the construction of the project,” Gordon said in prepared remarks. “Together with BTMU, we are engaging a group of experienced financial institutions as our core banking group and look forward to completing the financing of America’s first offshore wind farm, which will deliver significant environmental, energy and economic benefits to Massachusetts and the surrounding region.”
To date, Cape Wind has sold more than 77 percent of its projected power output through long-term power purchase agreements with utility providers National Grid and NStar. According to the company, it is the first U.S. offshore wind project to be fully permitted and to have been issued a commercial lease and received approval for its construction and operations plan by the U.S. Department of the Interior.
Cape Wind is considered to be in an informal race to construct the nation’s first offshore wind farm with Providence-based Deepwater Wind, which is planning a five-turbine wind farm to be located 3 miles southeast of Block Island.