The 120MW second phase of the Formosa 1 pilot array off Taiwan’s north-western coast has reached a full financial close after a consortium of eleven international and local banks as well as Denmark’s export credit agency (EFK) completed a NT$18.7bn ($627m) 16-year project financing.
Formosa 1 is a joint venture between Danish utility Orsted (35% ownership), Taiwanese developer Swancor Renewable (15%) and Macquarie Capital (50%).
Orsted in April had taken a financial investment decision (FID) for its part of the joint venture. Also, Siemens Gamesa Renewable Energy (SGRE) had been announced as the preferred supplier of 20 of its 6MW offshore machines for the array, which is slated to be built in 2019.
Formosa 1 is expected to be the first commercial-scale offshore array of the Asian island country, and forms part of pilot projects chosen in 2013 that are supposed to be operational by 2020.
“We are glad to see that this important project milestone has been achieved now,” said Matthias Bausenwein, Orsted’s general manager for Asia Pacific.
“Orsted’s strong track record and professional experience have contributed to the project financing success and we will continue with solid support throughout the construction of Formosa 1’s second phase.”
The batch of pilot projects also includes Taipower’s 109.2MW Changhua project, which is now expected to be completed only in late 2021, featuring Hitachi turbines, and a third project by China Steel that may be revoked for lack of progress.
A first two 4MW SGRE machines have already been operational since 2017 at the location some 2km to 6km from the Miaoli coast in North-Western Taiwan.
After the pilot projects, Taiwan targets to bring another 5.5GW in offshore projects online in the 2021-2025 period, among them 3.8GW in projects allocated in a May tender for guaranteed grid access coupled with a feed-in tariff (FIT).
Orsted in the May tender had won a batch of 900MW in projects off Changhua that are slated to be grid-connected in 2021.
The financial consortium for the Formosa 1 array comprises four local Taiwanese banks: Cathay United Bank, Taipei Fubon Commercial Bank, EnTie Commercial Bank, and KGI Bank. Furthermore, seven international banks have participated: ANZ Banking Group, BNP Paribas, Crédit Agricole Corporate and Investment Bank, DBS Bank, ING Bank, MUFJ Bank and Société Générale.
It is also the first participation of EKF in a project financing in Taiwan. The project financing for Formosa 1 has enabled the local financial community to prepare for future investments in large-scale offshore wind projects in Taiwan, Orsted says.