Orrick Advises on US$1.6bn Project Financing of 298MW Zhong Neng Offshore Wind Farm in Taiwan

• This is China Steel Corporation’s first entry into the offshore wind market.
• This financing is the first majority Taiwanese bank non-recourse financing of an offshore wind farm in Taiwan.
• The is the most “localised” offshore wind project in Taiwan to date.

Orrick advised the lenders and hedge providers on the approximately US$1.6 billion project financing of the 298MW Zhong Neng offshore wind farm, which is being developed in a joint venture between China Steel Corporation (CSC) (51%) and Copenhagen Infrastructure Partners (CIP) through its fund Copenhagen Infrastructure IV (49%).

The financing signed on November 24 and is expected to reach financial close shortly. The project is situated off the west coast of Changhua County, adjacent to CIP’s Changfang and Xidao offshore wind project, on which Orrick is also lenders’ and cover providers’ counsel. The project is the first in Taiwan to be mostly local bank financed on a non-recourse basis.

The lending group consists of 20 Taiwanese commercial and state-owned banks, together with some international banks, namely: Bank of Taiwan, Mega International Commercial Bank Co., Ltd., CTBC Bank Co., Ltd., Taiwan Cooperative Bank, Ltd., First Commercial Bank, Ltd., Land Bank of Taiwan, Hua Nan Commercial Bank, Ltd., Kaohsiung Branch, Chang Hwa Commercial Bank Ltd., Taishin International Bank Co., Ltd., Taipei Fubon Commercial Bank Co., Ltd., E.SUN Commercial Bank, Ltd., KGI Bank Co., Ltd., The Export-Import Bank of the Republic of China, Kaohsiung Branch., Taiwan Business Bank, Kaohsiung Branch., Bank of Kaohsiung Co., Ltd., The Shanghai Commercial & Savings Bank, Ltd., Crédit Agricole Corporate and Investment Bank, Taipei Branch., Sumitomo Mitsui Banking Corporation, Taipei Branch., Mizuho Bank, Ltd., Kaohsiung Branch and MUFG Bank, Ltd.

CSC and CIP worked together on obtaining grid allocation for Zhong Neng in 2018 and entered into a 20-year PPA with the state-owned Taiwan Power Company in 2019. Following financial close, CSC and CIP will together lead the project through its construction phase with the intended start of commercial operations in 2025. The project is expected to generate enough clean energy to power 300,000 households in Taiwan.

The Orrick team was co-led by a cross-border London/Singapore team of partners including Evan Stergoulis, Adam Smith and Jon Thursby and lead associate Oliver Sikora, together with invaluable input from associates Tom Harrison-Cripps, Emily Yung and David O’Donovan and trainees Taylor Brien and Junaid O’Balogun. Mark Beeley (International Arbitration and Dispute Resolution), Jonathan Rosen (Tax) and Bridget Winters (Tax) also provided support.

Adam commented, “We are delighted to be advising the lenders on the first Taiwanese bank led project financing of an offshore wind farm in Taiwan; a unique and landmark transaction in Asia’s largest offshore wind market.” Evan added, “This transaction consolidates Orrick’s leading position in the Asian offshore wind market. The firm has been involved on most of the Taiwan offshore wind projects that have achieved financial close to date, including advising contractors and on M&A. The firm is also highly active in Japan, where our team is the market leader, as well as South Korea and Vietnam, drawing on the strength of our extensive European and fast developing US offshore wind practices.”