BOSTON (AP) — The U.S. Department of Energy announced Tuesday it has conditionally committed to a $150 million loan guarantee for Cape Wind's proposed energy project off the coast of Cape Cod.
Company President Jim Gordon said the announcement represents an "important endorsement" by the federal government as Cape Wind seeks to attract the remaining private capital needed to get the estimated $2.6 billion project — which would become the first commercial-scale offshore wind facility in the U.S — underway.
When operational, the project's more than 100 turbines in Nantucket Sound are expected to produce more than 360 megawatts of energy, enough power to supply most of the electricity needs for Cape Cod, Nantucket and Martha's Vineyard. It also will create about 400 construction jobs and 50 operations jobs.
Cape Wind Associates spokesman Mark Rodgers said the loan guarantee, which still must be finalized, brings total financing for the project to roughly $1.45 billion.
That includes a $600 million commitment from EKF, Denmark's export credit agency; $400 million from an international syndicate led by Japan's Bank of Tokyo-Mitsubishi UFJ, France's Natixis and the Netherlands' Rabobank; $200 million from PensionDanmark, a Danish pension fund for public and private sector workers; and a $100 million equity stake from Siemens, the German engineering giant, which has also committed to supplying turbines to the project.
The project received federal approval in 2010, after years of reviews and permitting.
Rodgers said Cape Wind officials hope to complete financing by the end of the year so construction can begin in 2015. The project would be partly running by 2016 and fully operational by 2017, he said.
Massachusetts political leaders applauded the announcement Tuesday.
Gov. Deval Patrick said the project, when completed, will reduce America's reliance on fossil fuels, mitigate climate change and jump start a new U.S. industry.
"This funding will help Massachusetts make energy history and continue our leadership as a clean energy jobs hub for the entire nation," U.S. Sen. Edward J. Markey said in a statement.
But Audra Parker, president of the Alliance to Protect Nantucket Sound, a citizens group opposed to the project, dismissed the federal government's $150 million commitment as a "face-saving gesture."
Cape Wind's developers initially sought a $2 billion federal loan guarantee through a stimulus-related program in 2009, said Rodgers, the company spokesman. The company subsequently sought a $500 million loan guarantee through another Department of Energy program, he said. That ultimately led to the $150 million commitment announced Tuesday.