CDPQ, Cathay PE join Ørsted in 605-MW wind project off Taiwan
The Formosa I offshore wind park in Taiwan. Source: Swancor
Caisse de dеpоt et placement du Quеbec (CDPQ) and Taiwanese private equity fund Cathay PE will jointly acquire a 50% interest in the 605-MW Greater Changhua 1 offshore wind project from Ørsted A/S (CPH:ORSTED).
The Danish energy major announced the signing of the deals on Monday, saying that the two new partners will finance half of the payments under the engineering, procurement and construction (EPC) contract, which covers both the generation and transmission assets.
The total value of the transaction amounts to TWD 75 billion (USD 2.66bn/EUR 2.17bn), to be paid over the next two years. It will be funded via a mix of equity and senior long-term debt facilities from 15 international and local lenders, as well as a couple of Taiwanese life insurers, with five export credit agencies providing lending and guarantees.
In addition to keeping a 50% stake in the project, Ørsted will also act as the EPC contractor and will deliver long-term operations and maintenance (O&M) services from its base at the Port of Taichung. Among the two new investors, CDPQ will hold the larger stake, according to the announcement.
The stake buy represents the first time the Canadian institutional fund manager invests in an offshore wind farm in Asia Pacific.
"This investment in Taiwan, which represents an attractive market for CDPQ, allows us to further diversify our presence in Asia,” said Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ.
The transaction is subject to regulatory clearance by the local authorities.
Located about 35-60 kilometres off the coast of Changhua County, the Greater Changhua 1 site accounts for 605 MW of the 900 MW capacity to be added by the Greater Changhua 1 & 2a offshore wind cluster. Ørsted has already started construction work and expects to complete the process in 2022. The entire complex will be generating enough power per year to meet the annual consumption of about 1 million local homes.
In June 2018, Ørsted also earned the right to build another 920-MW offshore wind complex in Taiwan at the Greater Changhua 2b & 4 sites. If a final investment decision is taken, these wind farms will be built in 2025.