BOSTON (AP) — The board of a Danish export credit agency has approved a $600 million loan to the Cape Wind offshore energy project, the project's president announced Wednesday.
The loan from EKF was announced by Cape Wind President Jim Gordon at the GreenPower USA Offshore Wind Conference in Boston.
"EKF is a very knowledgeable and experienced investor in the offshore wind industry and they recognize that Cape Wind makes sense both economically and environmentally," Gordon said.
The wind farm proposed for Nantucket Sound off the coast of Cape Cod is expected to cost about $2.6 billion. If built, it will be the first offshore wind farm in the U.S.
A partnership between EKF and Cape Wind makes sense, EKF deputy CEO Soren Moller said.
Several Danish companies are already involved in the project, he said, and EKF has invested in similar wind energy projects in Europe.
"This is not a first for us," he said. "This is technology that is proven and a project that is well known."
Cape Wind last year secured a $200 million investment from a Danish pension fund. The project is also in the running for a $500 million U.S. Department of Energy loan guarantee.
EKF aids Danish companies building markets abroad, according to its website.
Established in 1922, EKF is owned and guaranteed by the Danish government but operated as a modern financial enterprise.
The loan is subject to the finalization of due diligence and completion of documentation.
The Cape Wind project, a decade in the planning, received federal approval in 2010 and has won the regulatory permits it needs to be built, but still faces several legal challenges.
"Today's announcement is another example of Cape Wind's reliance on conditional foreign investments," said Audra Parker, president of the Alliance to Protect Nantucket Sound, which opposes the wind farm project. "The high-priced and controversial project has yet to receive any U.S. financing or obtain a critical loan guarantee from the U.S. Department of Energy," she said.
The funding comes as the Massachusetts Department of Public Utilities approved 12 long-term power purchase agreements for onshore wind facilities in New England, representing a total of more than 409 megawatts of electricity, enough to power more than 122,000 homes.
Officials said the move represents the largest procurement of renewable energy in New England by Massachusetts utilities, and should reduce greenhouse gas emissions by 6.7 million tons over the life of the contracts.
The weighted average price from the contracts is less than eight cents per kilowatt hour.