BTMU loans US$2 billion to US offshore wind farm

The Cape Wind Project is the first offshore wind energy project in the USA.

Bank of Tokyo-Mitsubishi UFJ, Japan’s largest bank, finalized the loan deal with private developer, Cape Wind Associates. It will also act as the lead in coordinating commercial debt for the project.

BTMU is to arrange between US$1.8 billion and US$2 billion in loans for the project and to convert a federal production tax credit into cash.

The loan will go to build 130 offshore wind turbines. The Cape Wind Project is an offshore wind farm on Horseshoe Shoal in Nantucket Sound off Cape Cod, Massachusetts.

The project, which is expected to cost at least US$2.6 billion, will be financed through a combination of equity from investors and loans from banks and other institutions.

Siemens Energy Inc. is expected to build Cape Wind's turbines and might provide US$100 million for the project. It is seeking a loan guarantee for about US$350 million from the United States Department of Energy.

The turbines will be sited between 4 to11 miles offshore depending on the shoreline. At its peak, the turbines will generate 454 megawatts. The project is expected to produce an average of 170 MW of electricity.