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The Vineyard Wind 1 offshore wind project in Massachusetts closed a $1.2 billion tax equity package for commercial scale offshore wind with three major banks.
The $1.2 billion transaction was reached with J.P. Morgan Chase, Bank of America, and Wells Fargo. This first-of-its-kind deal is the largest single asset tax equity financing and the first for a commercial scale offshore wind project.
“We are continuing to make history with this first-in-the-nation project,” Avangrid CEO Pedro Azagra said. “Finalizing this tax equity transaction is a critical milestone in executing the financing plan for Vineyard Wind 1. It will allow us to continue financing the project to make it operational. We are now one step closer to delivering clean, renewable offshore wind energy to Massachusetts homes and businesses.”
Vineyard Wind 1 – an 800 MW project located 15 miles off the coast of Martha’s Vineyard – will be the first commercial scale offshore wind project in the United States. It will generate electricity for more than 400,000 homes and businesses in Massachusetts through its competitive long term power purchase agreements with National Grid, Eversource, and Unitil. It is expected to save ratepayers $1.4 billion over the first 20 years of operation and is anticipated to reduce carbon emissions by more than 1.6 million tons per year.
“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,” Tim Evans, partner and Head of North America for Copenhagen Infrastructure Partners (CIP), Avangrid’s partner on the project. “With this investment, Vineyard Wind 1 moves Massachusetts closer to its goal of reducing greenhouse gas emissions by 50% by 2030.”
CCA Group, Santander Corporate & Investment Banking, and Kirkland & Ellis served as financial and legal advisors to Vineyard Wind 1, CIP and Avangrid.
“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,” U.S. Rep. Bill Keating (D-MA) said. “The closing of this transaction marks a critical step for the financing of Vineyard Wind I, 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.”
Site construction began on the project in late 2021, and it achieved steel-in-the-water in June 2023. Further, Vineyard Wind built its first offshore substation in July 2023.
