Copenhagen Infrastructure Partners (CIP) and Avangrid have closed a tax equity package for Vineyard 1 with three US-based banks.
The $1.2bn deal was reached with JP Morgan Chase, Bank of America and Wells Fargo, making it the largest single asset tax equity financing and the first for a commercial scale offshore wind project.
“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,” said Tim Evans, partner and Head of North America for CIP.
“With this investment, Vineyard Wind 1 moves Massachusetts closer to its goal of reducing greenhouse gas emissions by 50% by 2030.”
Vineyard Wind 1 is an 800MW project located 15 miles off the coast of Martha’s Vineyard and will be the first commercial scale offshore wind project in the United States.
The project is expected to save ratepayers $1.4bn over the first 20 years of operation and to reduce carbon emissions by more than 1.6 million tons per year.
“The Inflation Reduction Act marked the most significant action Congress has taken on clean energy and climate change in our nation’s history, and today’s announcement is a critical reminder of the impact the IRA is having here at home,” said Congressman Bill Keating representing Massachusetts’s 9th District.
“The closing of this transaction marks a critical step for the financing of Vineyard Wind 1, and in turn for our clean energy economy and the union jobs that have been guaranteed through the first-of-its-kind Project Labor Agreement between Vineyard Wind and the Massachusetts Building Trades.”
CCA Group, Santander Corporate & Investment Banking, and Kirkland & Ellis LLP served as financial and legal advisors to Vineyard Wind 1, CIP and Avangrid.