Ørsted has signed an agreement with Cathay Life Insurance, the leading insurance company in Taiwan, and its affiliate Cathay Wind Power Holdings Co., Ltd, under which Cathay Life Insurance will acquire a 50 % ownership share of Ørsted’s 583 MW Greater Changhua 4 Offshore Wind Farm, with Ørsted retaining a 50 % share. The investment is the largest direct investment in an offshore wind farm made by a life insurer, marking a historic milestone for offshore wind in Taiwan. It also demonstrates Cathay Life’s strong support and commitment to the sector, contributing to Taiwan’s greener future.
The total sales price for the Greater Changhua 4 Offshore Wind Farm comprises the acquisition of a 50 % ownership share and the commitment from the partners to fund 50 % of the payments under the EPC contract for the wind farm. The total value of the transaction is approximately TWD 53.3 billion (approx. DKK 11.6 billion), which is to be paid in 2024 and 2025. All regulatory approvals have been obtained, and the closing of the transaction is expected before the end of the year.
Greater Changhua 4 is currently under construction alongside Greater Changhua 2b, where Ørsted has full ownership. The two offshore wind farms will have a combined capacity of 920 MW and are expected to be completed by the end of 2025. The Taiwan-based semiconductor company TSMC will offtake all power generated by Greater Changhua 2b and 4 via a 20-year fixed-price corporate power purchase agreement that the company signed with Ørsted in 2020.
Cathay Life insurance is a subsidiary of Cathay Financial Holdings, who is also an investor in Ørsted’s Greater Changhua 1 Offshore Wind Farm, through its Cathay Private Equity affiliate.
Per Mejnert Kristensen, Senior Vice President and CEO of Region APAC at Ørsted, says:
“We’re thrilled to work once again with our strong local partner Cathay to deliver the Greater Changhua 4 Offshore Wind Farm and provide stable clean energy to Taiwan. This landmark investment by Cathay Life, the largest made by a Taiwan life insurer in an offshore wind farm, is backed by nine international banks, three local private banks and three state-owned banks, as well as six foreign and local export credit agencies (ECAs). The transaction, which was significantly oversubscribed, not only underlines the banking sector’s confidence in Ørsted's track record in building and operating offshore wind farms but also sets a new green investment paradigm in Taiwan."
He adds: “We continue to see robust demand from investors seeking low-risked investments with stable returns in offshore wind farms. Through implementing Ørsted’s unique partnership model in Taiwan, we aim to have long-term collaborations with quality investors and attract more local capital to further drive the growth of offshore wind and Taiwan’s energy transition.”
Andrew Liu, President of Cathay Life Insurance, says: “We’re delighted to partner with Ørsted on the development of the Greater Changhua 4 Offshore Wind Farm project. This investment underscores our dedication to supporting the government's renewable energy transition while simultaneously generating stable, long-term returns that align with the investment goals of the insurance sector.”
As part of the agreement, Ørsted will construct the Greater Changhua 4 Offshore Wind Farm under a full-scope EPC contract. Ørsted will also provide long-term operations and maintenance (O&M) services from its O&M hub at the Port of Taichung.
Cathay Life and its affiliate Cathay Wind Power will acquire a 50 % share of Greater Changhua 4 via a multi-tranche financing package from 15 financial institutions, with HSBC Bank (Taiwan) Limited and CTBC Bank Co., Ltd. as the foreign and local financial advisors.
The local private banks are: CTBC Bank Co., Ltd.; Taipei Fubon Commercial Bank Co., Ltd.; E.SUN Commercial Bank, Ltd.; and the three state-owned banks are First Commercial Bank, Ltd.; Mega International Commercial Bank Co., Ltd.; and Land Bank of Taiwan.
The international banks are: Australia and New Zealand Bank Group Limited, Taipei Branch; Citibank Taiwan Ltd.; Crédit Agricole Corporate and Investment Bank, Taipei Branch; DBS Bank (Taiwan) Ltd.; HSBC Bank (Taiwan) Limited; Oversea-Chinese Banking Corporation Limited, Taipei Branch; Standard Chartered Bank (Taiwan) Limited; Société Générale, Taipei Branch; and the Korea Development Bank.
The financing package, which was structured and led by Ørsted, will be supported by guarantees from six international and local export credit agencies (ECAs): Credendo, the Export and Investment Fund of Denmark (EIFO), Export Finance Australia (EFA), Korea Trade Insurance Corporation (KSURE), National Credit Guarantee Administration (NCGA), and UK Export Finance (UKEF).
This transaction marked the first offshore wind financing guaranteed by the National Credit Guarantee Administration (NCGA), which was organized by the Executive Yuan of Taiwan and the National Development Fund and operates through the Export-Import Bank of the Republic of China (T-EXIM). Additionally, it is also the first time that the state-owned First Commercial Bank has taken on the role as T-EXIM facility agent in an offshore wind financing project. These developments demonstrate the state-owned banks’ growing confidence and involvement in the Taiwanese offshore wind sector, injecting fresh momentum into the industry’s growth.
