Sponsors line up ECAs for Taiwanese offshore financing

02 July 2019 - 12:00 am UTC

Macquarie Capital and its Taiwanese development partner, Swancor Renewable, have lined up export credit agencies to lend into the 378MW Formosa 2 Taiwanese offshore wind project, according to bankers.

 

U.K. Export Finance, Belgian’s Credendo; and Denmark’s EKF will all lend into the facility but commercial banks have not yet been told if they made the cut, the bankers said.

 

Several of the Taiwanese offshore projects are on very tight financing timetables. Formosa 2 is slated for commissioning next year.

 

The sponsors had hoped to reach financial close last month, but it now looks to have been pushed back to next month at the earliest, the bankers added.

 

Late last year, Macquarie and Swancor issued a request for proposals to banks through their adviser Société Génerale, as first reported by SparkSpread on 10 December 2018.

 

Banks responded to Société Génerale with size and price bids in the middle of January, but heard nothing for months while the sponsors and their debt advisor worked out which ECAs they were going to use and which turbine manufacturer they would pick.

 

Last month, the sponsors named Siemens Gamesa as the turbine manufacturer for the project and Belgian’s Jan De Nul as the contractor for the offshore cabling and foundations.

 

At about the same time, the debt financing kicked off again.

 

In December, Macquarie and Swancor signed a 20-year PPA with state-owned Taipower with a feed-in-tariff of TWD7.1 (USD 0.23) per kWh for the first ten years and TWD3.5 per kWh for the second 10 years. They chose this over a 20-year fixed rate of TWD5.8/kwh.

 

Macquarie’s involvement in the project has not been officially announced, but it is understood to own 75% of the project.

 

Macquarie and Swancor are also in the process of selling down equity in Formosa 2 to reduce their equity contribution to the project.

 

Marubeni Corp., Thailand’s EGCO, Canada’s OMERS and Switzerland’s Partners Group were among a wide group of potential bidders in the initial stages of the sale.

 

Last June, Macquarie and its minority partners Orsted (35%) and Taiwanese developer Swancor Renewable (15%) reached financial close on Formosa 1.

 

Eleven international and local Taiwanese banks and Danish export credit agency EKF signed a TWD18.7bn 16-year project financing package for Taiwan’s first utility-scale offshore wind farm.

 

One banker noted the sponsors could use the Formosa 1 financing as a template for Formosa 2.

 

The syndicate comprised ANZ, Bank of Tokyo Mitsubishi-UFJ, BNP Paribas, Credit Agricole, DBS Bank, Deutsche Bank, ING Bank, and Société Génerale, as well as local lenders Cathay United Bank, EnTie Commercial Bank, Fubon Bank, and KGI Bank.

 

BNP advised on the Formosa 1 debt raising.

 

Clifford Chance was sponsors’ counsel and Linklaters was lenders’ counsel.

 

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