Macquarie defends sale of wind project shareholding

By Ted Chen  /  Staff reporter

Fri, Mar 15, 2019 - Page 12

Macquarie Capital Ltd on Wednesday said that it remains commitment to Taiwan’s transformation toward renewable energy beyond 2025 and would continue to support government projects, including exploration for liquefied natural gas, upgrades of the energy grid and geothermal power.

Asked about concerns that Macquarie’s decision to sell part of its stake in the Formosa I wind project would leave other investors and lenders with all the risk, Macquarie Taiwan country head Ryan Chua (蔡毅霆) said the sale is a crucial part of its business.

“Our role in Taiwan’s nascent offshore wind industry is that of a developer and a lead arranger of leadership capital,” Chua told reporters at a news conference in Taipei.

Leadership capital is what gets projects that are unfamiliar territory — as offshore wind is — going, while conventional investors are unable to take on the high level of perceived risk, Chua said.

Macquarie has its own team of experts capable of navigating the many challenges of a renewable project, from engineering, procurement and construction, to gaining government approvals, he said.

“Effectively, we de-risk a project and create an asset as projects mature, which suits investors’ needs,” Chua said, adding that the company can leverage its experience from projects in Europe.

With Formosa I to join the national energy grid before the end of this year, Macquarie in December last year announced that it would sell part of its 50 percent stake in the offshore wind project to Japan’s Jera Co, a utilities company.

Formosa I’s income stream has been locked in with the government’s feed-in tariff and would be enough to cover interest costs and generate returns, Chua said, adding that Jera’s purchase is a testament to the project’s viability.

The sale is how Macquarie is recycling capital to fund new projects, he said.

The company is also looking into Taiwan’s independent power producer industry, he said.

Macquarie held a forum to share its experience in infrastructure and renewable energy to an audience of about 200 representatives of institutional investors and government departments, including the Energy Bureau.