Orsted is to sell a 50% stake in the 605MW Greater Changhua 1 offshore wind farm to a consortium comprising global institutional investor Caisse de depot et placement du Quebec (CDPQ) and Taiwanese private equity fund Cathay PE.
Under the terms of the NT$75bn (€2.2bn) transaction, Orsted will construct Greater Changhua 1 under a full-scope EPC contract and will also provide long-term operations and maintenance services from its O&M base at the Port of Taichung.
The deal comprises the acquisition of a 50% ownership share and the commitment from the partners to fund 50% of the payments under the EPC contract for the wind farm which includes both the generation and transmission assets.
The money will be paid during 2021 and 2022.
CDPQ will be the majority owner among the two new partners.
The investors’ 50% stake in Greater Changhua 1 will be funded through a combination of equity and senior long-term debt facilities from 15 international and Taiwanese banks and two Taiwanese life insurance companies as well as five export credit agencies providing lending and guarantees.
The divestment is subject to regulatory approval from the Taiwanese authorities.
Greater Changhua 1 is part of the 900MW Greater Changhua 1 & 2a offshore wind farm, which Orsted is currently constructing and expects to finalise in 2022.
Orsted Offshore executive vice president and chief executive Martin Neubert said: “I’m delighted to welcome our long-term partner CDPQ and Cathay PE in Greater Changhua 1.
“It’s encouraging to once again see institutional investors playing an important role in the transition to renewable energy and low-emission economies.
“Today’s announcement also marks a milestone in successfully applying our partnership farm-down model in Asia-Pacific for the first time.”
CDPQ executive vice-president and head of infrastructure Emmanuel Jaclot said: “This investment in Taiwan, which represents an attractive market for CDPQ, allows us to further diversify our presence in Asia.
“As an investor with vast experience in renewable energy, we seek this kind of greenfield opportunity to contribute to the transition toward a low‑carbon economy.
“Working alongside our long-term partner, Orsted, and experienced local investor, Cathay PE, we are proud to support Greater Changhua 1, which will supply clean power to over 650,000 Taiwanese families.”
Cathay PE chairman Jeff Chang said: “We are delighted to team up with CDPQ to invest alongside Orsted in Greater Changhua 1.
“This landmark transaction represents an important milestone in Taiwan’s energy transition towards a low-carbon future and fits perfectly with Cathay PE’s investment mandate to invest in high quality energy infrastructure projects alongside world class partners.”
Orsted Asia-Pacific president Matthias Bausenwein said: “We’re looking very much forward to working with our new partners in the consortium and supporting Taiwan’s energy transition, not least through a strong collaboration with the financial sector in Taiwan.
“Bringing long-term infrastructure investors and Taiwanese banks into Greater Changhua 1 is another milestone for the Taiwanese market, underlining its pioneering role in the Asia-Pacific region.
“While bringing in partners, Orsted remains fully committed to constructing and operating the project during its lifetime.”
Orsted’s said the announcement does not changes previous financial guidance for the 2020 financial year or the announced expected investment level for 2020.