A large Danish pension fund has pledged $200 million in financing for the proposed Cape Wind project in Nantucket Sound, the first public commitment of funds for the controversial project.
The amount is still a fraction of the more than $2 billion the project needs to be built and is contingent on other investors buying in by the end of the year. Yet the announcement is the most significant since the project gained federal approval in 2010 amid a slumping economy and uncertainty over federal tax incentives to build.
PensionDanmark has already invested in Danish offshore wind farms and three land-based farms in Texas and Pennsylvania. Its chief executive said in a statement that Cape Wind was an attractive investment opportunity.
“We are delighted to participate in the Cape Wind project,’’ Torben Möger Pedersen said.
The physical conditions of Nantucket Sound, an experienced supplier, and established power-purchase agreements make the proposed 130-turbine farm especially promising, said Copenhagen Infrastructure Partners, which is managing the fund PensionDanmark will use to finance Cape Wind.
Cape Wind is attempting to secure funding by the end of the year for at least 101 turbines whose power they have already sold; the remaining 29 turbines do not yet have buyers for their power. This year is particularly critical because federal tax credits for offshore wind were extended in 2013 for projects under construction; future credits are uncertain.
In March, Cape Wind announced that the Bank of Tokyo-Mitsubishi UFJ had pledged to be a major financial backer of the project and was arranging backing through other banks. It has not been disclosed how much they will finance.
Opponents were unimpressed by the announcement.
“Cape Wind has announced it is getting a conditional commitment versus a final investment decision for less than 10 percent of its development cost for a downsized project from a Danish supplier for its European turbines after over a decade of trying,’’ said Audra Parker of the Alliance to Protect Nantucket Sound in an e-mail. She said that opposition by Massachusetts business groups and remaining lawsuits “continue to show 2013 is the beginning of the end for Cape Wind.”
Jim Gordon, Cape Wind’s president, said in a statement he is eager to welcome the investment from experienced investors in offshore wind.
“This important investment is a milestone in the Cape Wind project,’’ Gordon said.