Global renewable energy developer Ørsted is selling a 50% stake in Greater Changhua 1 offshore wind farm in Taiwan to a consortium comprising of Caisse de dépôt et placement du Québec (CDPQ) and local investor Cathay PE for about NT$75 billion (US$2.67 billion).
Ørsted will retain a 50% share in the project, which will be financed by its corporate balance sheet and will deliver the long-term operations and maintenance (O&M) services to the project. The 605-megawatt (MW) wind farm is part of the 900MW Greater Changhua 1 & 2a offshore wind farms, which Ørsted is currently constructing and expects to be completed in 2022. Majority of the deal proceeds will be used to pay for the engineering, procurement and construction (EPC) services for the project.
Ørsted Asia-Pacific (APAC) president Matthias Bausenwein says the sale of the 50% stake to CDPQ and Cathay PE represents its commitment to share its vast offshore wind financing experience with Taiwan's financial community since the early stages of developing the Greater Changhua projects.
Ørsted vice-president and head of partnerships & structured solutions Kunal Patel notes the transaction marks the evolution of the company’s partnership model into Taiwan, leveraging on its extensive track record of development, construction and operation of large offshore wind farms. “With a long-term agenda in Taiwan, we remain committed to the Greater Changhua 1 project and will also re-utilize the capital into further developing new offshore wind projects to assist Taiwan in achieving its energy transition goals.”
The 50:50 partnership is the first of its kind in APAC offshore wind sector and will help stimulate further opportunities in the Taiwanese market for offshore wind. This also represents the first time that CDPQ is investing in an offshore wind farm in APAC and adds to its long list of investments in solar and wind energy across the Americas, Europe and India.
Commenting on its investment, CDPQ executive vice-president and head of infrastructure Emmanuel Jaclot says Taiwan is an attractive market for the company, and the acquisition allows CDPQ to diversify its presence in Asia.
“As an investor with vast experience in renewable energy, we seek this kind of greenfield opportunity to contribute to the transition towards a low-carbon economy,” he points out.
Adds CDPQ managing director for infrastructure in APAC Cyril Cabanes: “We are committed to further expand our renewables and energy footprint in Asia-Pacific, building upon this investment and other successful platforms that we have developed in India and Australia over the past few years.”
Cathay PE chairman Jeff Chang describes the transaction as an important milestone in Taiwan’s energy transition towards a low-carbon future and says it fits perfectly with the company’s investment mandate to invest in high-quality energy infrastructure projects alongside world-class partners.
CDPQ and Cathay PE will acquire the 50% stake in the Greater Changhua 1 project through a multi-tranche financing package from 15 international and local banks as well as from two local life insurance companies.
These are Cathay United Bank, CTBC Bank, E.SUN Bank, Taipei Fubon Bank, Cathay Life Insurance Company, Taiwan Life Insurance Company, BNP Paribas, Crédit Agricole CIB, Deutsche Bank, DZ Bank, HSBC, Oversea-Chinese Banking Corporation, Korea Development Bank, Siemens Bank, Société Générale, Standard Chartered and Sumitomo Mitsui Banking Corporation.
The financing package, which was structured and led by Ørsted, will be partially supported by guarantees and/or loans from five international export credit agencies (ECAs): EKF of Denmark, UK Export Finance (UKEF), Atradius of the Netherlands, Korea Trade Insurance Corporation (KSURE) and Export Development Canada (EDC), which participates for the first time in an offshore wind farm deal in Taiwan.
The Greater Changhua 1 offshore wind farm will supply clean power to over 650,000 Taiwanese families. The transaction is still subject to all customary and regulatory approvals by Taiwanese authorities.
CDPQ is one of Canada’s leading institutional fund managers and invests globally in financial markets, private equity, infrastructure, real estate and private debt. As at June 30 2020, it held C$333 billion (US$260 billion) in net assets.