Emerging Financial Trends in Offshore Wind Projects for 2024

In early 2024, a series of financial deals emerged with implications for the financing of offshore wind projects. Traditionally considered part of utility finance, offshore wind projects are now attracting interest from infrastructure investors due to their high-risk nature. Consultants from McKinsey highlighted the shift in infrastructure investing towards accepting more uncertainty in cash flows, driven by energy, mobility, and digitization revolutions.

One notable development is the construction of the Wind Turbine Installation Vessel (WTIV) Charybdis by Dominion Energy for the Coastal Virginia Offshore Wind (CVOW) project. Dominion secured a 50% stake in the project from fund packager Stonepeak, showcasing the interest of financiers in offshore wind projects. Stonepeak’s investment reflects the growing trend of infrastructure investors structuring deals to manage risks and returns effectively.

Despite recent setbacks in the offshore wind sector, infrastructure investors like BlackRock, Copenhagen Infrastructure Partners (CIP), and Global Infrastructure Partners (GIP) continue to show interest in offshore wind projects. The sector’s long-term nature aligns well with financial tools like tax equity packages, which leverage incentives such as tax credits to attract investment. As offshore wind projects face challenges, the involvement of infrastructure investors with expertise in renewable energy deal structuring could help navigate uncertainties and ensure project viability.

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