Plans for the first large scale offshore wind project in Taiwan could soon be finalized. German developer wpd AG has announced that financing for the 640 MW Yunlin project will be completed with a group of investors and banks within a "few weeks", while debt will be hedged via Taiwanese banks. The total funding package will therefore be ready by the end of the year, and installation can thus begin in 2019.
"As with all our previous projects, for Yunlin, too, we are able to rely on strong, well-known partners as investors who this time can take a maximum stake of 49 percent in this project," says Achim Berge Olsen, member of the Management Board of wpd AG, in the press statement.
"Although we have discovered that there is great interest with regard to capital, not least from the Asian region, and we are several times oversubscribed, we will remain the majority shareholder with over 50 percent equity, and we will manage Yunlin with our team."
The finalization of the ownership structure comes after Bloomberg cited anonymous sources in May, indicating that wpd was hunting for a potential buyer, a claim the property developer then shut down. Minority shareholders have not yet been announced.
What is known is that the Taiwanese farm will be supplied by Siemens Gamesa. In spring 2018, the turbine manufacturer was nominated as preferred supplier of 80 SG 8.0-167 DD turbines and a 15 year maintenance contract.
When money from banks and investors is secured and the final financial decision is made, the contract can be rendered firm and unconditional. After this, Siemens Gamesa can secure contracts with its suppliers, of which many were announced in August. This applies to several Danish companies including AH industries, Jupiter Bach, KK Wind Solutions and Nissens.
Several Taiwanese companies are among the suppliers, often in partnership with western companies. It is not only on the production side that local players are required by authorities although the regulatory requirements are less tight on the Yunlin project – which is due to be completed in 2020 – than for subsequent parks. There is also a requirement of local financing.
This is partly attributed to the Taiwanese dollar, which requires cooperation with local banks. Furthermore, connections to Taiwanese financial institutions also appeared in the tender conditions set out by the Taiwanese authorities, which are required to account for 10 percent of financing, as long as at least 20 percent of financing is sourced from local banks.
Wpd has clearly had this in mind. Besides nominating Japanese bank Sumitomo Mitsui Banking Corporation (SMBC) as financial consultant, it also also announced a partnership with Taiwan's largest state bank, Bank of Taiwan, as co-consultant and private bank E-Sun as a further local advisor.
"On the debt side, we can see strong commitment on the part of the Taiwanese banks. For us it is very important to be able to integrate the know-how of the local financial institutions," says Olsen in the press release.
English Edit: Lena Rutkowski