Copenhagen Infrastructure Partners (CIP) and Iberdrola Group’s subsidiary Avangrid have secured a $1.2bn tax equity package for the 800MW Vineyard Wind 1 offshore wind farm in the US.

The investment transaction for the American offshore wind farm was reached with J.P. Morgan Chase, Bank of America, and Wells Fargo.

According to CIP, the raised capital is the largest single asset tax equity financing and the first for a commercial scale offshore wind project.

CIP North America head and partner Tim Evans said: “Closing on a tax equity package has always been a central element to achieving financial success for the first-of-its-kind Vineyard Wind 1.

“With this investment, Vineyard Wind 1 moves Massachusetts closer to its goal of reducing greenhouse gas emissions by 50% by 2030.”

The project is located in federal wind energy area OCS-A-0501, 24km south of Martha’s Vineyard and Nantucket, and 56km from mainland Massachusetts. It is being developed by Vineyard Wind, a 50-50 joint venture (JV) company between CIP and Avangrid.

The Vineyard Wind 1 offshore wind farm, which entails an investment of €2.5bn, will be equipped with 62 wind turbines.

Once completed, the offshore wind facility will produce clean energy to power over 400,000 households and businesses in Massachusetts. The project is underpinned by long-term power purchase agreements with National Grid, Eversource, and Unitil.

Avangrid CEO Pedro Azagra said: “Finalising this tax equity transaction is a critical milestone in executing the financing plan for Vineyard Wind 1.

“It will allow us to continue financing the project to make it operational. We are now one step closer to delivering clean, renewable offshore wind energy to Massachusetts homes and businesses.”

The Vineyard Wind 1 project is estimated to save $1.4bn for ratepayers over its first 20 years of operation.

Besides, the American offshore wind project will mitigate carbon emissions by more than 1.6 million tons annually.

CCA Group, Santander Corporate & Investment Banking, and Kirkland & Ellis were financial and legal advisors to Vineyard Wind 1, CIP, and Avangrid.

Last week, Avangrid and CIP completed the installation of the first wind turbine of the Vineyard Wind 1 offshore wind project. The installed GE Haliade-X Wind Turbine Generator (WTG) has a nameplate capacity of 13MW.

The American offshore wind facility started on-site construction in late 2021. Installation of its first offshore substation was completed in July 2023.