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Ørsted inks green loan for Changhua projects

By: Tom Russell 20/06/2019 Ørsted

Corporate General Windfarms

Ørsted has announced the signing of its five-year NTD 25 billion syndicated green revolving loan facility for Greater Changhua projects. A total of fifteen banks joining the green facility and marks the first time that local state-owned banks in Taiwan are involved in financing offshore wind projects. It is also the first time all eight state owned banks have participated in a green loan facility for offshore wind.

On 30th April 2019, Ørsted made the final investment decision for the Greater Changhua 1 and Greater Changhua 2a projects. Ørsted’s treasury team together with Bank of Taiwan, BNP Paribas and Cathay United Bank, the mandated lead arrangers, subsequently completed a roadshow with local and foreign banks in Taiwan in May. Within less than two months, the deal was finalized.

Participating banks include eight stated owned banks: Bank of Taiwan, Mega International Commercial Bank, Chang Hwa Commercial Bank, Land Bank of Taiwan, Taiwan Cooperative Bank, First Commercial Bank, Hua Nan Commercial Bank, and Taiwan Business Bank.

Private banks which join the green facility include: BNP Paribas, Cathay United Bank, E. Sun Commercial Bank, Taishin International Bank, CTBC Bank, KGI Bank, and Deutsche Bank AG.

Allan B. Andersen, Senior Vice President for Treasury & Risk Management, said ‘’We are very pleased with the commitment from 15 banks on this transaction, especially the domestic Taiwanese banks. We are proud of this being the first ever green loan facility in Taiwan under our new Green Finance Framework which matches our ambition of doing all of Ørsted’s financing in the green format.”

Ørsted will now start preparations for a potential green bond issuance in the local market towards the end of this year. Ørsted will fund 50% CAPEX of the Greater Changhua projects by capital contributions from the Ørsted Group combined with debt capital sourced from local Taiwanese financial institutions - backed by an Ørsted A/S parent company guarantee.

Matthias Bausenwein, President for Ørsted Asia Pacific, said that “This green revolving loan facility provides local financial institutions with an opportunity to tap into the offshore wind industry and boost their confidence in financing offshore wind projects. This is a significant step forward, to bring clean energy to the people in Taiwan. A step jointly taken by Ørsted and local financial institutions.”

The Greater Changhua 1 and Greater Changhua 2a offshore wind projects will be located 35 to 50 kilometers off the coast of Changhua County, with a combned capacity of approximately 900MW, enough to supply around 1 million Taiwanese households with green power. The offshore wind farms will be constructed in 2021 and 2022.

Ørsted is developing four offshore wind sites within the Greater Changhua site off Taiwan. With a potential 2.4GW capacity, the sites are expected to be capable of powering 2.8 million homes in Taiwan. It is also the co-owner of Taiwan’s first commercial-scale offshore wind project, Formosa 1, which will be extended from its current 8MW capacity to 128MW in 2019.

Ørsted is one of the biggest operators of offshore wind farms, with over 1,000 turbines in operation. Its operational portfolio totals around 5.6GW offshore wind capacity, with a further 4.3GW under construction. It aims to have installed a total offshore wind capacity of 15GW worldwide by 2025.

Taiwan holds strong potential for renewable energies, with its positive government outlook. After deciding to phase out nuclear power by 2025 – with nuclear energy accounting for some 40% of power generation in the past – the Taiwanese government aims to make up for the resulting shortfall by expanding renewable energies, especially offshore wind power. The government aims to install 5.5GW of offshore wind power by 2025.

For more information on the Taiwanese offshore wind market, click here.

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Ørsted inks green loan for Changhua projects

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