Northland Power and its partners have met all conditions and completed the NT$117bn (€3bn) financing for the 1GW Hai Long offshore wind project off Taiwan.
David Povall, Chairman of the project, said: “For Hai Long, securing financing is a significant achievement, not only highlighting the viability of offshore wind as a renewable energy source, but also demonstrating the ability of international investors to jointly achieve their goals.
“The success of this financing also underscores Taiwan’s commitment to playing a leading role in the global renewable energy market.
“Thanks to the joint efforts of the program team, partners, government and project lenders, Hailong was able to achieve this major milestone in the project.”
The financing will be provided by 16 international and local banks, including China Trust, Taipei Fubon Bank, Taiwan Life, Fubon Life, HSBC, Crédit Agricole Bank, Auspreci Bank, Sumitomo Mitsui Banking Corporation, Mizuho Bank MUFG Bank and Deutsche Bank.
A high proportion of the funds in this joint loan case will be provided by local financial institutions.
At the same time, Hai Long has obtained the highest credit guarantee ratio from Taiwan’s history, provided by seven export credit agencies, including Export Development Canada (EDC), Japan Bank for International Cooperation (JBIC), Japan Trade Insurance (NEXI) and UK Export Finance Agency.
The financing and construction costs of the Hai Long project are denominated in multiple currencies, most of which are in NT$.
In order to comply with the risk management strategy of shareholders and the terms of project financing, Hailong adopts a combination of fixed rate and long-term interest rate hedging to manage interest rate risk.
In addition, Hai Long also uses foreign exchange hedging strategies to cope with construction costs beyond the range of financing currencies.
Located approximately 45 to 70 km off the coast of Changhua in the Taiwan Strait, Hai Long is divided into a two-phase wind farm development of Hailong 2 and Hailong 3.
The Hai Long 2A wind farm was allocated 300MW of grid-connected capacity, while the Hai Long 2B and 3 wind farms were allocated in Taiwan’s first auction, in 2018, 744MW of grid-connected capacity.
Subsequently, Hai Long signed a 744MW corporate power purchase agreement in 2022.
All EIA approvals and major work permits have been obtained, and early construction and manufacturing of key components has commenced. Construction is expected to be completed in 2025 and 2026.