Deutsche Bank Supports Taiwan’s Hai Long Wind Farm

Taiwan’s efforts to realise its zero carbon emissions by 2050 received a boost with the Deutsche Bank’s announcement that it has completed a bespoke deal-contingent interest rate hedge and a tailored financing for Hai Long, Taiwan’s largest offshore wind project to date.

The project will consist of Hai Long 2 and Hai Long 3 wind farms and aligns with the Taiwan’s effort to promote renewable energy development and support local industries. Offshore installation for the project is expected to begin in 2024 while commissioning will be completed in 2026.

Once completed, the wind farm will supply the equivalent of the electricity consumed by more than 1 million households in Taiwan (roughly 10% of its population) annually. Hai Long is expected to play an important role in helping Taiwan achieve its goal of constructing 5.7 GW of offshore windfarms by 2025.

Hai Long is a 1.044 gigawatt (GW) offshore wind project developed and owned by Northland Power Inc (Canada) and Mitsui & Co (Japan). This transaction represents the largest offshore wind project financing in the region. It is located about 50 km off the coast of Changhua County in water depths of up to 55 m.

The total project cost is approximately $6.5 billion, of which approximately $3.6 billion is being raised through project financing with support from ECAs from six different countries, and a number of international and local financial institutions. The project is Northland’s first offshore wind project in Asia and the fifth in its offshore wind portfolio.

Deutsche Bank previously financed the construction of Northland’s first ever offshore windfarm in The Netherlands. Upon the project’s financial closing, Gentari International Renewables Pte Ltd, a wholly owned subsidiary of Petronas of Malaysia, will acquire a 29.4% indirect equity interest in Hai Long. Northland will own 30.6% and continue with the lead role in construction and operation.

Fourth Mega Funding

The deal is Deutsche Bank’s fourth large scale project financing and hedging transaction in the offshore wind sector in Taiwan, further demonstrating the bank’s broad product offering and strong track record in renewables in Asia Pacific. Deutsche Bank has financed nearly 3 GW of wind power capacity for Taiwan thus far. This represents over 50% of Taiwan’s ambitious target for offshore wind energy by 2025.

Deutsche Bank Chief Executive Officer for Taiwan Cynthia Chan said that their tailored project finance and risk management solutions for our clients have been instrumental in the buildout of Taiwan’s renewable energy sector.

“To date, we have helped finance nearly 3 GW of wind power capacity for Taiwan across 4 large-scale transactions. Each transaction is unique and highly complex, involving multiple jurisdictions and a wide range of product requirements,” Chan explained.

“We are pleased to bring the full strength of our global network and award-winning structuring capability to bear in supporting these projects, and Taiwan’s broader decarbonisation objectives,” Cynthia Chan added.