Deepwater completes financing for Block Island wind farm

THE DEEPWATER WIND TEAM meets recently at the wind energy company's Providence offices, including, from left, consultant Jan Ibsoe, CEO Jeffrey Grybowski, contractor David Grassbaugh and Bryan Wilson, Block Island Wind Farm project manager. / PBN FILE PHOTO/MICHAEL SALERNO
THE DEEPWATER WIND TEAM meets recently at the wind energy company's Providence offices, including, from left, consultant Jan Ibsoe, CEO Jeffrey Grybowski, contractor David Grassbaugh and Bryan Wilson, Block Island Wind Farm project manager. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Deepwater Wind LLC announced Monday the securing of more than $290 million in debt and equity financing for its five-turbine, 30-megawatt Block Island Wind Farm project.
Paris-based Societe Generale Group and Cleveland-based KeyBank N.A. have agreed to finance the offshore wind project slated to be erected about three miles southeast of Block Island.
The project is on track to become the first fully-functional offshore wind farm in the nation and is into year one of its two-year construction plan. Deepwater Wind CEO Jeffrey Grybowski said in a statement he was “ecstatic” about the partnership with the financial institutions.
“We’re full speed ahead and moving ever closer to ‘steel in the water’,” Grybowski said.
The financing is added to more than $70 million in equity already provided by the company’s owners, principally the investment entity D.E. Shaw Group. Deepwater Wind initially estimated the project would cost about $225 million. The financing amount includes more than just the construction costs. It also includes transaction costs for the financing, additional financing arrangements for the operations period and contingency funds.
Alexander Krolick, director of energy project finances in the Americas at Societe Generale, said in a statement he was proud to partner with the U.S. leader in offshore wind power.
“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 [Societe Generale’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,” Krolick said.
Societe Generale will act as the project’s managing underwriter and financial adviser.
Grybowski told Providence Business News earlier this year he expects the project to be operational by 2016. National Grid PLC, Rhode Island’s dominant utility, has a contractual obligation to purchase energy produced by the five turbines for 20 years.
In its first year, National Grid will pay 24.4 cents per kilowatt hour, which will increase 3.5 percent yearly through the two decades. The electricity produced is expected to make up 90 percent of Block Island’s demand and 1 percent of Rhode Island’s.
The company in a press release detailed the project’s construction thus far:

  • Alstom, a French multinational company, will supply five Haliade 150 6-megawatt 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, La., 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 Inc. is expected to begin additional fabrication work on components of the foundation substructures at Quonset Business Park in North Kingstown in the coming weeks

“We’ve brought together some of the best American and European expertise to build an outstanding project and finance team,” Grybowski said. “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.”

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