The Financial Supervisory Commission (FSC) yesterday pledged to support facilitating private sector investments in offshore wind farms and address uncertainties about the technology.
The challenges in carrying out offshore wind farm projects include the technical and engineering aspects as well as securing the necessary financing, FSC Vice Chairman Cheng Cheng-mount (鄭貞茂) said at the sidelines of a PricewaterhouseCoopers (PwC) Taiwan forum in Taipei.
While investment models for offshore wind farms have matured in developed markets, local financial companies are hesitant about the technology, Cheng said.
“Companies are reluctant to step forth as pioneers when there are no precedents to follow, and they are having a difficult time assessing offshore wind farm investments under their usual credit evaluation and approval processes,” Cheng said.
The commission is ready to help investors and lenders participate in offshore wind farms through securitization once new projects are initiated by the Ministry of Economic Affairs, he said.
BNP Paribas SA’s Taiwan branch, Citibank Taiwan Ltd (台灣花旗) and ANZ Bank (Taiwan) Ltd (澳盛台灣商業銀行) are highly interested in offshore wind projects, and one of them is likely to become the market pioneer in leading investments, Cheng said.
Commenting on Taiwanese financial companies’ lack of experience in such projects, former FSC chairwoman Jennifer Wang (王儷玲), who left the post in May last year, said that local banks should participate in more syndicated loans with international partners and take away new findings.
Wang is a professor at National Chengchi University’s Department of Risk Management and Insurance.
Robert Tsai (蔡朝陽), chairman of wind turbine blade resin manufacturer Swancor Holding Co Ltd (上緯), told the forum that the nation could set up a certification system to identify qualified suppliers and developers to ease investors’ concerns.
Such a system would encourage lenders and investors to serve as guarantor institutions for the projects, Tsai said.
In the past 10 years, the proportion of offshore wind farm projects not backed by guarantors has fallen from 56 percent to 27 percent around the world, with the number of participating banks rising from five to 40, Tsai said, adding that Taiwan has seen little progress during the period.
Taiwan has a unique geography and its climate represents an advantage for wind energy, and that its surrounding waters are one of the top three sites in the world with more than 15 gigawatt-hour in potential output, PwC said.
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