Macquarie Capital clinches Taiwan’s first offshore wind PF close

The firm has a pipeline of over 2GW of Taiwanese offshore wind projects and is also active in other Asian offshore wind markets like Japan and Korea.

Taiwan’s 128MW Formosa I offshore wind farm has reached financial close today with its largest shareholder, Macquarie Capital, securing the island’s first project finance debt facility for the sector.

A consortium of seven international and four local banks, as well as Danish export credit agency EKF, provided the 16-year project financing of 18.7 billion New Taiwan dollars ($625 million; €531 million), according to an Ørsted statement.

Macquarie Capital added the project secured a 20-year power purchase agreement with state-run Taiwan Power Company. The project’s total development cost is estimated at around $840 million, according to Tom Harries, a wind analyst at Bloomberg New Energy Finance.

The firm bought a 50 percent stake in Formosa I from local developer Swancor Renewable in January 2017, with the latter remaining in the project with a 15 percent stake. Danish offshore wind developer Ørsted, formerly known as DONG Energy, owns a 35 percent interest in the project.

A final investment decision by Macquarie Capital confirms its 50 percent ownership for the second phase of the project, featuring 120MW of capacity, allowing it to proceed to its next stage of development, with construction to be completed in late 2019. The first phase of 8MW has been up and running since October 2016.

The firm’s Taiwan head, Ryan Chua, said the team is “committed to smooth delivery of the project and further development of our over 2GW offshore wind pipeline in Taiwan”.

Having said that, it has been reported that Macquarie Capital is considering divesting part of its 50 percent stake in the Formosa I project and has started speaking to potential buyers. A source familiar with the matter told Infrastructure Investor the firm is committed to the completion of the project with its partners.

Macquarie Capital declined to comment on the potential divestment and the project development.

Taiwan has a 5.5GW target for offshore wind by 2025, with 20 percent of its power to be generated from renewable sources. The Taiwanese government recently awarded 3.8GW of grid-connection capacity to allow offshore wind projects to proceed with their development. A further 2GW is to be auctioned this year.

In addition to its activities in Taiwan, Macquarie Capital also went beyond the island in search of offshore wind opportunities in North Asia in recent months.

Earlier this month, Macquarie Capital Korea signed a memorandum of understanding with a private company called Gyeongbuk Floating Offshore Wind Power, for the development of a 1GW floating wind power project off the cost of Gyeongju, North Gyeongsang province, in south-eastern South Korea. The project, which is Korea’s first offshore wind farm to be installed in international waters, is expected to cost at least 6 trillion won ($5.57 billion; €4.73 billion), according to Chang Daihyun, chief executive of the Korean developer.

In April, the firm signed another MoU with French developer Ideol through its Japanese renewables platform Acacia Renewables, to work on the development of Japan’s first utility-scale commercial floating offshore wind farm.

John Walker, Macquarie Capital’s vice chairman for Asia tells Infrastructure Investor in a video interview that renewables in Asia present the biggest global investment opportunity.