Ørsted Sells Interest in Taiwan Offshore Wind Farm to Life Insurance Co.

 

Ørsted is expanding the use of the partnership model to Taiwan’s developing offshore wind energy sector by selling a half interest in its under construction Greater Changhua 4 project to Cathy Life. The largest direct investment in an offshore wind farm made by a life insurer, the deal is valued at $1.64 billion and is a further demonstration of investor interest in the sector.

The Greater Changua offshore wind cluster located between about 21 and 37 miles offshore in Taiwan’s northwest quadrant, is the largest and farthest offshore wind farm in Taiwan in terms of installed capacity and distance from the shore. It is divided into four sectors with the second phase also split into two subsectors. When completed, it will provide 1.82 GW of power.

As of the beginning of 2024, Ørsted reported that 107 turbines out of the total 111 wind turbines in Sections 1 and 2 were completed, with nearly 85 percent of them connected to the grid, representing approximately 700 MW, making it the largest grid-connected capacity for a single wind farm in Taiwan. Sections 1 and 2A are now completed with 2B and 4 expected to be completed by the end of 2025.

Ørsted has already partnered for the 605 MW Greater Changhua 1 which is co-owned with Caisse de dépôt et placement du Québec (CDPQ) and Cathay Financial Holdings, with a combined ownership stake of 50 percent. Under the newly announced deal, Taiwan’s leading life insurance company, Cathy Life, will acquire a 50 percent stake in Section 4’s 583 MW capacity. Taiwan-based semiconductor company TSMC will offtake all power generated by Great Changhua 2b and 4 with a 20-year fixed-price corporate power purchase agreement.

The two companies will partner on the investment in the development of the wind farm. Ørsted will continue to have operation and maintenance responsibilities. 

The project is unique as it has also won broad support from nine international banks, three local private banks, and three state-owned banks. It is also the first time that the state-owned First Commercial Bank has taken a role. The financing package for Changhua 4 will also be supported by guarantees from six export credit agencies.

Private equity and other investors have shown strong interest in 2024 in the offshore wind sector, especially in acquiring stakes in mature development projects. It reduces Ørsted’s risk and capital requirements which the company reports it is being used to develop other projects. Other developers are following a similar model to spur the development of the industry.