Deepwater Wind Block Island, a wholly-owned
subsidiary of Deepwater Wind, has fully financed the Block
Island Wind Farm, reaching
financial close on more than $290 million in project financing provided
by Mandated Lead Arrangers Societe Generale of Paris, France, and KeyBank
National Association of Cleveland, Ohio.
In addition to its role as Mandated Lead Arranger, Societe Generale also
acts as Financial Advisor for Debt Raise, Bookrunner and Administrative
Agent.
With these major agreements, Deepwater Wind has now secured all debt and
equity funding needed to construct and operate its 30-megawatt
Block Island Wind Farm –
already under construction.
Deepwater Wind is the only United States offshore wind company to reach
this critical milestone. The
Block Island Wind Farm will
be America’s first offshore wind farm.
“We’re ecstatic to reach financial close and thrilled to be partners
with Societe Generale and KeyBank for this groundbreaking clean energy
project,” said Deepwater Wind CEO Jeffrey Grybowski. “We’re full speed
ahead and moving ever closer to ‘steel in the water.’”
“We at Societe Generale are proud to be a partner of Deepwater Wind, the
U.S. leader in offshore wind power,” said Alexander Krolick, Director
of Energy Project Finance in the Americas at Societe Generale. “Deepwater
has assembled a world class management team and experienced contractors
to develop this landmark project. As the first offshore wind farm to be
developed in the U.S., the Block Island Wind Farm represents a milestone
that expands SG’s offshore wind sector footprint outside of Europe and
further strengthens our extensive global track record of advising clients
and arranging debt for offshore wind projects.”
“Deepwater has long been at the forefront of offshore wind development,”
said Andrew Redinger, managing director and head of KeyBanc Capital Markets
Utilities, Power and Renewables Group. “We are pleased to provide financing
for the first offshore wind project to be fully financed in the U.S., and
look forward to working with Deepwater on future, transformative projects.”
The financing from Societe Generale and KeyBank is in addition to more
than $70 million in equity funding already provided by Deepwater Wind’s
existing owners, principally an entity of the D.E. Shaw Group.
Construction is well underway on the wind farm.
• Alstom will supply
five Haliade 150 6 MW offshore wind turbines
for the project and has already completed the fabrication in Denmark of
all 15 blades for the project.
• Gulf Island Fabrication, Inc., began
fabrication work in January 2015 at its facilities in Houma, Louisiana,
on the wind farm’s five steel jacket foundations. That work is scheduled
to be complete in several months.
• Rhode Island-based Specialty Diving Services is expected to begin additional
fabrication work on components of the foundation substructures at Quonset,
Rhode Island in the coming weeks.
“Steel in the water” is planned for this summer, when all five foundations
are scheduled for installation off the Block Island coast. The project
will be in-service in the fourth quarter of 2016.
“We are on the cusp of bringing offshore wind from theory to reality in
the U.S. We’re incredibly proud of our position at the forefront of the
U.S. offshore wind industry,” Grybowski said. “We’ve brought
together some of the best American and European expertise to build an outstanding
project and finance team. We’re poised to launch a new American clean-tech
industry, and it all starts here with our work on the Block
Island Wind Farm.”
Latham & Watkins, LLP acted as borrower’s counsel; Hinckley Allen,
LLP, of Providence, R.I., acted as local counsel; and Van Ness Feldman,
LLP acted as regulatory counsel to Deepwater Wind Block Island.
Chadbourne & Parke, LLP acted as lenders’ counsel and Locke Lord Edwards,
LLP, of Providence, R.I., acted as lenders’ local counsel, and Mott MacDonald
acted as Independent Engineer.
Green Giraffe acted as financial advisor for commercial arrangements to
Deepwater Wind Block Island, mandated
in 2011 by Deepwater Wind to assist them in procuring non-recourse financing
for the 30 MW Block Island offshore wind project. It is the first financing
for an offshore wind project in the USA, which is expected to be completed
by the summer of 2016.
Compared to the recently announced Horns Rev 3, where the
award amounted to a subsidy of €103.1
the level of subsidy for Block Island project highlights the immaturity
of the US market for offshore wind.
"Horns
Rev 3 writes Danish Offshore Windfarm
history with a significant drop in the cost of construction of offshore
wind. The proud boast from the Danes came from their Minister for Climate,
Energy and Building Minister Rasmus Petersen Authority
who went on to state "There is no doubt that the power from offshore
wind turbines will continue to be an essential part of the green transition
and contribute effectively to reducing CO2 in the atmosphere. The Danish
low price is largely due to technology development throughout the wind
industry, combined with a very successful tendering process. Through extensive
dialogue and subsequent negotiations with the bidders, the DEA has managed
to lower the price considerably".
However the Danish price represent only part
of the overall cost as the Danish system does not require the bidder -
Vattenfall - to pay for use of transmission assets, unlike many other countries,
for example the UK (through TNUOS charges to National Grid).
Despite having a bigger scope for their cost
base, UK bid prices do show a significant drop, recently demonstrated in
last weeks announced auction results by the UK Government. They awarded
two contracts (Contracts for Difference) to Offshore wind farm developer
of East
Anglia Phase 1 Offshore Wind farm
and Neart
na Gaoithe Offshore Wind farm.
The controversial UK green energy auction was hailed as a huge success
by the UK government and according to them has significantly driven down
prices. ScottishPower
Renewables (East
Anglia Phase 1 Offshore Wind farm
bidder) hailed a major breakthrough
in its efforts to reduce the costs of offshore wind and successfully secured
their Contract for Difference (CfD) in the competitive auction process
run by the UK Government for East
Anglia ONE. Their winning
bid was priced at £119/MWh (€164/MWh) and only for 15 years.
The UK government takes the view that consumers
are getting more for their money and that the clearing price for offshore
wind was 18% lower than the price would have been without competition.
For
interactive map of the location click this link - zoom in for details