Cape Wind: 200 m USD investment

PensionDanmark to fund 200 million USD investment in Cape Wind Via the fund Copenhagen Infrastructure I, managed by Copenhagen Infrastructure Partners, the pension fund PensionDanmark is funding a conditional investment commitment of 200 million USD in America’s first offshore wind farm, Cape Wind. The aim is to close the deal to construct the wind farm this year. The wind farm is to supply up to 500.000 households with power.

Following 12 years’ development, financial closing of America’s first offshore wind farm, Cape Wind, is now anticipated. The Danish pension company PensionDanmark, via the fund Copenhagen Infrastructure I managed by Copenhagen Infrastructure Partners (CIP), is now funding an investment commitment of 200 million USD in capital for the Cape Wind project (in the form of a mezzanine loan). As a lighthouse project, Cape Wind is crucial to advance the offshore wind industry in the United States.

“We are delighted to participate in the Cape Wind project. Investing in energy infrastructure is not new to us. We have made equity investments in two offshore wind farms in Denmark and three onshore wind farms in the USA and provided debt financing for onshore wind parks in Sweden and Belgium. At a time when bond yields are very low, this is expected to be an attractive investment opportunity for us,” says CEO Torben Möger Pedersen, PensionDanmark.

With up to 130 Siemens turbines of 3.6 MW each, Cape Wind could become one of the world’s large offshore wind farms. The first season of the project, in which the investment is expected, covers 101 of the turbines. The commitment is conditional upon a final investment decision to be made by the end of the year. “The Cape Wind project has some attractive project characteristics in terms of the physical conditions of the site and an experienced supplier base, and we expect the final project details to be in place later this year. Power purchase agreements have been secured covering the production of the first phase for the first 15 years and the plans include the use of proven and operationally stable technology”, says Christian Skakkebæk, who is a partner in Copenhagen Infrastructure Partners (CIP).

The fund Copenhagen Infrastructure I, managed by CIP, was established in 2012 at the initiative of PensionDanmark, which has committed DKK 6bn to the fund and is its sole investor. The man behind the Cape Wind project, the founder and owner of the Boston-based energy company Energy Management Inc., Jim Gordon, welcomes the Danish investment.

“This important investment is a milestone in the Cape Wind project. We are pleased to welcome PensionDenmark and CIP into the project as experienced investors in offshore wind,” says Jim Gordon.

Facts about PensionDanmark:
The largest labour market pension fund in Denmark, managing assets of DKK 145 bn on behalf of 630,000 members. PensionDanmark has already invested more than DKK 6bn in infrastructure, including the Danish offshore wind farms Nysted and Anholt and three US wind farms in Texas and Pennsylvania. PensionDanmark expects to invest a further DKK 12bn in infrastructure assets over the next 4‐5 years, half of which will be invested via Copenhagen Infrastructure I managed by Copenhagen Infrastructure Partners.

Facts about Copenhagen Infrastructure Partners:
Copenhagen Infrastructure Partners (CIP) was established in 2012 with PensionDanmark as the seed investor, committing DKK 6bn to its first fund (Copenhagen Infrastructure Partners I). CIP is owned and run by four partners: Jakob Barüel Poulsen, Torsten Lodberg Smed, Rune Bro Roin and Christian Skakkebæk, all of whom have a long‐standing experience, e.g. from DONG Energy, within infrastructure investment and acquisition and sale of companies.

Facts about Cape Wind: 
The Cape Wind project is the first offshore wind farm in USA. The project was launched in 2001 and a financial closing is expected to be made by end‐2013. Cape Wind has been approved for construction in the Nantucket Sound off the coast of Massachusetts and will have a total capacity of 454 MW (1,500 GW per year), corresponding to 75% of consumption in the areas Cape Cod, Martha’s Vineyard and Nantucket. Cape Wind will reduce carbon emissions by over 777.000 tonnes a year. The energy utilities National Grid and NSTAR have made commitments to purchase the power when the wind farm has been constructed. The project will be financed through a combination of equity from investors and loans from banks and other institutions. The Japanese Bank of Tokyo‐Mitsubishi UFJ is expected to coordinate in debt financing for the project. Jim Gordon is the founder of the Boston‐based energy company Energy Management Inc. and the man behind the project.

Cape Wind suppliers: Siemens: 101‐130 3.6MW‐107 turbines; Rambøll: Design of foundations; K2: Adviser to the client.

About Copenhagen Infrastructure Partners

Copenhagen Infrastructure Partners P/S (CIP) is a fund management company focused on energy infrastructure including offshore wind, onshore wind, solar PV, biomass and energy-from-waste, transmission and distribution, and other energy assets like reserve capacity and storage. CIP has approximately 110 employees and offices in Copenhagen, Taipei, New York, Tokyo, Utrecht, and London.

CIP manages six funds and has more than EUR 8 bn under management. CI I, CI A I and CI A II have PensionDanmark as founding- and sole investor. CI II has 19 Danish and international institutional investors and CI III has 42 institutional investors from the Nordics, Continental Europe, the UK, Israel, Asia, Australia, and multi-lateral organizations e.g. EIB. CI NMF I has 15 investors from the Nordics and Continental Europe.

CIP was founded in 2012 by senior executives from the energy industry in cooperation with Pension Denmark.