KfW IPEX to structure financing for offshore wind farm in Taiwan

The total project cost is estimated at US$3 billion with an installed capacity of 589MW

GERMAN development bank KfW IPEX-Bank has taken on a leading structuring role in the financing of the Changfang and Xidao offshore wind farm in Taiwan.

The financing consortium comprises 25 international and Taiwanese banks and financial institutions as well as six export credit agencies. KfW IPEX-Bank is providing and guaranteeing debt capital in the equivalent amount of US$115 million.

The total project cost is estimated at US$3 billion.

The wind farm will have an installed capacity of 589MW. It comprises 62 V-174-9.5 MW wind turbines from Danish manufacturer MHI Vestas, which will be erected around 15 kilometres off the coast of the Taiwanese region of Changhua. Apart from MHI Vestas, a number of other European exporters are also involved in the construction.

A 20-year power offtake agreement has been signed with the state-owned Taiwan Power Corporation. Full commissioning is scheduled for the end of 2023.

The majority owner and sponsor of the offshore wind farm is the Danish company Copenhagen Infrastructure Partners (CIP), via its funds Copenhagen Infrastructure II (CI II) and Copenhagen Infrastructure III (CI III). A minority stake is owned by two local life insurance companies, Taiwan Life Insurance and TransGlobe Life Insurance.

MUFG acted as financial advisor and CTBC as the local financial advisor for the project debt financing. White & Case acted as legal advisor and Baker McKenzie as the local legal advisor. FIH Partners acted as financial advisor to CIP.

Watson Farley & Williams advised the project loan syndicate on what is the largest debt package raised in the Taiwanese offshore wind market to date.

The syndicate of lenders comprised: MUFG Bank Ltd (also financial adviser to the project), ABN AMRO, Crédit Agricole Corporate and Investment Bank, CTBC Bank, Deutsche Bank, DBS Bank, EnTie Commercial Bank, E-SUN Commercial Bank, Hong Kong and Shanghai Banking Corporation, J.P. Morgan, KDB, KGI Bank, KFW, Mizuho Bank, Natixis, OCBC, Santander, Société Générale, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, and Taipei Fubon Bank, as well as the Taiwanese life insurance companies and a member of the CIP group (each of whom provided sponsor senior debt). Financing cover was provided by seven cover providers: Atradius (Netherlands), EKF (Denmark), GIEK (Norway), KFW (Germany), K-SURE (South Korea), NEXI (Japan), and UKEF (UK).

Copenhagen Infrastructure Partners P/S (CIP) is a fund management company focused on energy infrastructure including offshore wind, onshore wind, solar PV, biomass and energy-from-waste, transmission and distribution, and other energy assets like reserve capacity and storage. CIP manages five funds and has nearly 8 billion euros under management. CI I and CI A have PensionDanmark as founding and sole investor. CI II has 19 Danish and international institutional investors and CI III has 42 institutional investors.

Date

11 Mar 2020

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