Ørsted has reportedly started preparatory work for solicitation of a syndicated loan worth billions of NT dollars for an offshore wind-farm project in 2019, with the aim of completing grid connection by 2021.
Ørsted announced in March 2018 that its parent company will provide full guarantee for loans provided by Taiwanese financial institutions, which, plus issuance of green bonds, will be used in funding its investment project in Taiwan, at staggering scale of NT$380 billion. Local media report that there should be no problem for the syndicated loan, which will be provided by a banking consortium, likely to be headed by Bank of Taiwan, Mega Bank, and Cathay United Bank.
In April, the Ministry of Economic Affairs unveiled the screening result for offshore wind-power projects, with those scheduled for grid connection by 2020 including Yunneng wind farm of wpd Taiwan and Formosa II of SWancor and 10 other wind farms by six developers, scheduled for grid connection during 2021-2025, including two projects in Changhua of Ørsted, plus projects of wpd Taiwan.
SWancor has three wind-farm projects, including Formosa I for which it has obtained NT$18.7 billion loan from 11 local and foreign banks. Having passed the environmental impact assessment review, Formosa I is scheduled for completion by 2020. wpd Taiwan is in talk with Bank of Taiwan for arranging 15-year NT$120 billion loan, which will be raised in two stages, with the first part of NT$64.7 billion to be launched in Q3 2018.
Ørsted’s two wind-farm projects in Changhua will have capacities of 605.2 MW and 294.8 MW, respectively, which together are comparable to the scale wpd Taiwan’s projects totaling 1,058 MW in capacity. The aforementioned syndicated loan for Ørsted will proceed along with the second-stage loan for wpd Taiwan next year, topping NT$130 billion.
Another investment team led by China Steel has also reportedly begun talk with Mega Bank for syndicated loan, for which there is ample time, though, since the project is scheduled for grid-connection in 2020-2024, similar to projects of Taipower.
Given lack of risk-assessment talent for offshore wind power projects, banks will face the problem for the guarantee for the loans. The Ministry of Finance has proposed the setup of third-party fair institutions to assist with the risk evaluation.