An $800 million green loan facility launched by Ørsted brings together 15 banks to finance the company’s first commercial offshore wind farms in Taiwan.
“Taiwan is eager to expand its share of renewable energy. The country’s financial institutions want to be a part of that green transition, but up until now there have been limited opportunities to get directly involved in offshore wind,” says Kasper Kiim Jensen, Senior Director of Treasury & Funding at Ørsted, the largest energy company in Denmark.
"The financing of Ørsted’s offshore wind farms offers a simple and transparent opportunity for local banks, which will ultimately help to secure clean power for local consumers," he added.
The renewable energy company pointed out that Taiwan has set ambitious renewable energy targets.
In 2018, the Taiwan government contracted Ørsted to build the 900-megawatt (MW) Greater Changhua 1 & 2a offshore wind farms, off the country’s west coast. These wind farms are big enough to supply power to around one million Taiwanese households, Ørsted said.
To draw sustainable finance into the Changhua projects, Ørsted launched a green loan facility worth NTD 25 billion ($800 million). The facility has proven popular and attracted funding from 15 local and international banks, eight of which are state owned banks that are financing offshore wind for the first time.
The facility enables Ørsted to withdraw or repay amounts as needed for construction of the Changhua projects, providing greater flexibility than traditional lending models. Drawing loans in local currency helps guard against volatility in the Taiwanese dollar, reduces complexity and lowers Ørsted’s overall risk.
“The facility is the first in green format in the Taiwanese market and fits with our ambition to finance purely green going forward. It aligns with local banks’ desire to participate in the green transformation and can contribute to developing green financing in Taiwan. The facility also helps Ørsted to build strong links with the local financial market,” said Kasper Kiim Jensen.
The green loan facility is the first such offered by a Danish company and marks the first time Ørsted establishes a green facility. The company said it plans to invest up to $30 billion exclusively in green energy toward 2025.
Under the terms of the green loan facility, Ørsted will report to the Taiwanese lender banks on use of the funds, and the capital expenditure and avoided carbon emissions from the relevant projects.
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