Wind farm expects construction start off Cape Cod by year-end

By Scott DiSavino

March 19 (Reuters) - Cape Wind said Tuesday it expects tocomplete financing for its long-delayed 468-megawatt offshorewind farm and start construction of the project in federal wateroff Cape Cod, Massachusetts, by the end of the year.

Cape Wind said in a statement it selected Bank ofTokyo-Mitsubishi UFJ, a unit of Japanese bank holding companyMitsubishi UFJ Financial Group, as its coordinatinglead arranger of the commercial bank portion of the debtfinancing for the project.

The wind farm has been in development since 2001. Cape Windhas said some turbines could be in service in 2015.

Energy experts have said it will cost about $2.6 billion tobuild the wind farm.

Separately, the U.S. Department of Energy is considering aloan guarantee for the project. Cape Wind said it cannot say howmuch it is seeking from the DOE.

BTMU is providing a significant amount of debt capital thatwill be used to pay for development and construction of theproject, Cape Wind said. The company could not say how much BTMUwas expected to raise.

"Obtaining financing is one of the last steps to completebefore proceeding with the construction of the project," saidJim Gordon, Cape Wind president.

Several developers are working to become the first U.S.offshore wind farm, including Cape Wind and privately heldDeepwater Wind, off Rhode Island.

A unit of UK bank Barclays Plc will continue toadvise Cape Wind on raising the remaining financing needed, CapeWind said.

Cape Wind has sold 77.5 percent of its power output inlong-term power purchase agreements to the Massachusetts unit ofNational Grid Plc and Northeast Utilities' NSTARunit, the two largest power companies in Massachusetts.