Ørsted has signed a five-year NT$25Bn syndicated revolving loan facility for the Greater Changhua offshore wind projects
Ørsted has signed a five-year NT$25Bn (US$799M) syndicated revolving loan facility for the Greater Changhua offshore wind projects, and local banks participated.
The facility, guaranteed by Ørsted A/S, attracted 15 banks and also provided opportunities to local financial institutions to participate in offshore wind projects with minimal risk exposure. Concerns have sometimes been expressed about the willingness of local lenders in Taiwan to participate in financial instruments for offshore wind.
This is the first time local state-owned banks in Taiwan have been involved in financing offshore wind projects, and the first time that all eight state-owned banks in Taiwan participated in a green loan facility for offshore wind.
On 30 April 2019, Ørsted took a final investment decision for the Greater Changhua 1 + 2a projects. Ørsted’s treasury team together with Bank of Taiwan, BNP Paribas and Cathay United Bank, the mandated lead arrangers, subsequently completed a roadshow with local and foreign banks in Taiwan in May.
In less than two months, the deal was finalised with the following state owned banks participating in the facility: Bank of Taiwan, Mega International Commercial Bank, Chang Hwa Commercial Bank, Land Bank of Taiwan, Taiwan Cooperative Bank, First Commercial Bank, Hua Nan Commercial Bank, Taiwan Business Bank. Private banks participating in the facility included: BNP Paribas, Cathay United Bank, E. Sun Commercial Bank, Taishin International Bank, CTBC Bank, KGI Bank, Deutsche Bank AG.
Ørsted senior vice president for treasury and risk management Allan Andersen said the company was particularly pleased with the commitment by domestic Taiwanese banks.
Ørsted president Asia Pacific Matthias Bausenwein said the revolving loan facility provides local financial institutions with an opportunity to tap into the offshore wind industry and boost their confidence in financing offshore wind projects.
Ørsted will fund 50% capex of the Greater Changhua projects by capital contributions from the Ørsted Group combined with debt capital sourced from local Taiwanese financial institutions – backed by a Ørsted A/S parent company guarantee.
The offshore wind developer will now start preparing for a potential green bond issuance in the local market towards the end of this year.