In May, Cape Wind Associates, the developer of the 454MW project to be built 7.7 kilometres off the Massachusetts coast, announced it had secured a mezzanine debt investment of $200 million from Danish pension fund PensionDanmark.
However, speaking exclusively to Windpower Monthly, PensionDanmark chief executive Torben Möger Pedersen revealed that his firm's loan was dependent on the project securing subsidy support from the US federal government.
"Our commitment to Cape Wind is conditional on the project being started before the end of the year," said Möger Pedersen.
Cape Wind Associates is hoping to secure an offshore investment tax credit (ITC) from the US government and, under current US law, both this and the production tax credit (PTC) are only available to projects that have begun construction by 1 January 2014.
A Cape Wind Associates spokesman told Windpower Monthly he was confident the project, which has faced years of delays due to local opposition, would meet the construction start terms as set out by the Internal Revenue Service (IRS) earlier this year.
According to IRS Notice 2013-29, released on 15 April, to meet the "under construction" qualification, developers must either show "physical work of a significant nature" has begun on their project, either at the site, or in a factory to which the developer has given a binding order for specially designed equipment; or show that at least 5% of the total project cost has been incurred.
It is understood that Cape Wind Associates is aiming to meet the latter definition and sign contracts totalling 5% of the estimated $2.6 billion overall project cost by the end of the year. This would mean spending $130 million by 1 January 2014.
Cape Wind Associates signed a $15 million pre-cabling works contract, and it is expected that several more cabling deals will be announced in the coming weeks.
Amid the race for finance, the project also received a boost from Siemens, which is supplying the project's 468MW of wind turbines. Siemens, which is to supply its 3.6MW turbine to the project, said it was prepared to back the project, although this was dependent on the "final financing conditions".
It shows Siemens' backing for the project is still in place two years after its chief financial officer Josef Kaeser said the German technology giant had offered to provide debt and equity financing. At the time, he said: "We've always made it clear that we are not only willing but also capable of helping support the whole project."