Page 4 - AsiaElec Week 01

AsiaElec COMMENTARY AsiaElec
MHI Vestas Offshore
secures funding for
Asian wind expansion
Japan’s government and banks have provided $924mn of debt financing to support MHI Vestas’ expansion into Taiwan, a major stepping stone to wider business in Asia, writes Richard Lockhart
TAIWAN
WHAT:
MHI Vestas is to provide turbines for 600MW of offshore capacity in Taiwan
WHY:
Tokyo wants Japanese manufacturers to win new business in the growing Asian market
WHAT NEXT:
MHI Vestas aims to transfer its offshore experience in Europe to Asia
MHI Vestas Offshore Wind is set to close a JPY100bn ($924mn) loan and trade finance insurance deal with a range of Japanese and for- eign lenders to finance the export of Japanese wind turbine technology to a new 600-MW project in Taiwan’s Greater Changhua offshore wind area.
The deal overcomes a key funding hurdle for MHI Vestas Offshore Wind to supply up to 900 MW of wind turbines to Taiwan’s rapidly expanding offshore wind market, and could serve as a stepping stone for further business in other Asian economies.
Japan’s MUFG Bank, Sumitomo Mitsui Banking and Mizuho Bank, along with Deutsche Bank and HSBC, are to provide JPY100bn ($924mn) of debt, according to reports in the Japanese media.
The Japanese government’s Nippon Export and Investment Insurance (NEXI) will provide trade insurance for JPY45bn ($416mn) of loans.
The coverage amount is believed to be one of the largest ever for renewable energy-related trade insurance in Japan.
The banks aim to use the export deal to Tai- wan, which leads in offshore wind power, as a foothold for expansion elsewhere in Asia.
The deal provides the funding for MHI Ves- tas Offshore wind to export its technology to Taiwan, where it is also setting up local manu- facturing facilities for switchgear, turbine blade materials and towers in order to meet the Tai- wanese government’s localisation rules.
Project details
The project will build a wind power plant with a total output of 600 MW off the coast of the west- ern county of Changhua.
The facility is slated to go online partially in 2022, with full output by 2024. The project is esti- mated to cost around JPY400bn ($3.7bn).
The Greater Changhua offshore wind area
represents the Taiwanese government’s plans to achieve 5.5 GW of installed offshore wind capac- ity by 2025. It has also set a target of 10-17 GW for 2030.
Although the Japanese banks and govern- ment did not announce which wind develop- ment would use the Japanese turbines, MHI Vestas’ website does say that it is the preferred supplier to the 552-MW Zone 27 project, which is being developed by Copenhagen Infrastruc- ture Partners (CIP).
Indeed, in October 2018 MHI Vestas and CIP signed a formal localisation agreement that would create TWD$9.2bn ($306mn) of local economic value.
This follows deals with local manufactur- ers CS Wind and Chin Fong (towers), Swan- cor (blade materials) and Shihlin Electric (switchgears).
MHI Vestas also states that it is the preferred turbine supplier for the Greater Changhua area’s 300-MW Zone 29 project, to be developed by China Steel, and the 48-MW Xi Dao project.
Expansion in Taiwan
The Greater Changhua offshore is Taiwan’s major offshore wind development area.
The most advanced projects in the area are being developed by Denmark’s Ørsted, which has obtained site exclusivity to develop four off- shore wind sites in the area, with a planned total generation capacity of 2.4 GW.
In April 2018, it was awarded capacity for Changhua 1 and Changhua 2a (together 900 MW). Construction here is expected to begin in 2021, with the capacity coming online between 2022 and 2024.
In June 2018, Ørsted was awarded develop- ment rights for 920 MW at Changhua 2b and Changhua 4. Here, a final investment decision (FID) is planned for 2023, with commercial start-up in 2025.
The Greater Changhua offshore wind area represents the Taiwanese government’s plans to achieve 5.5GW of installed offshore wind capacity by 2025
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w w w. N E W S B A S E . c o m Week 01
08•January•2020