Danish energy company Orsted A/S has selected three local lenders as lead banks to oversee a syndicated loan to finance its offshore wind projects in Changhua County.
State-owned Bank of Taiwan (台灣銀行), BNP Paribas Taiwan and Cathay United Bank Co (國泰世華銀行), are to oversee a five-year revolving credit facility of NT$25 billion (US$810.4 million), Orsted said
The syndicated loan is expected to attract about 10 other local lenders and be finalized in the first quarter of next year, Orsted and the three lead banks told a news conference in Taipei.
Given the smaller scale of the loan, local lenders can use the opportunity to familiarize themselves with financing opportunities in the offshore wind power industry while limiting exposure, Bank of Taiwan said.
As half of the loan issue is guaranteed by Orsted, it presents a perfect opportunity for Taiwanese lenders to try their hand at renewable energy financing and tap into an emerging industry at relatively lower risk, Orsted regional general manager Matthias Bausenwein said.
Orsted was the biggest initial public offering on the NASDAQ Copenhagen when it was listed in June 2016, Bausenwein said, adding that the company is 50.1 percent owned by the Danish state.
The company has maintained investment grade and sound credit ratings of “BBB+” and “Baa1” respectively, and is fully capable of developing, building, owning and operating world class wind power plants in Taiwan, he said.
Following deregulation by the Financial Supervisory Commission, Orsted is also planning to become one of the first foreign companies to issue green bonds denominated in New Taiwan dollars, he said.
Orsted is considering issuing a separate NT$165 billion in green bonds to finance its bigger offshore wind sites in Changhua, but its final decision would depend on whether it is able to sign a power purchase agreement (PPA) with the government at the current feed-in tariff rate, Bausenwein said.
As the end of the year nears, Orsted is still awaiting final approvals to ink a PPA.
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