The offshore wind project Zhong Neng, a joint venture between Copenhagen Infrastructure Partners (“CIP”) through its fund Copenhagen Infrastructure IV (“CI IV”) and China Steel Corporation (“CSC”), signs project financing agreement and is expected to reach financial close shortly. The project is located next to CIP’s offshore wind farm, Changfang and Xidao, which is currently under construction. Zhong Neng received approval of its local content plan in November 2019 from the Taiwan government and is to date the most localised offshore wind project in Taiwan. The project will utilize jacket foundations to be supplied by CSC’s subsidiary, Sing Da Marine Structures, and Vestas will provide 31 174-9.6MW turbines.
“CIP is very pleased to have reached this important project milestone in close collaboration and partnership with our joint venture partner, CSC. We are excited about shortly entering the construction phase of Zhong Neng which will, once commercial operation starts, provide clean energy to approximately 300,000 households in Taiwan. Since CIP, and its international network companies, entered the Taiwan offshore wind market in 2017, we have worked intensively with Taiwanese companies and the government to build up the local supply chain, and we are therefore proud to deliver the project with the highest extent of localization in Taiwan to date together with CSC.” said Michael Hannibal, Partner in CIP.
The 298MW offshore wind farm will be financed through a combination of equity from CI IV and CSC and loans from a consortium of 20 banks. A total of approximately USD 1.6bn (NTD 45bn) in project financing was raised through a successful process.
CI IV is a 49% shareholder in Zhong Neng, with the remaining 51% being owned by CSC. CSC and CIP have worked together on obtaining grid allocation for Zhong Neng in 2018 and entering into a 20-year PPA with the state-owned Taiwan Power Company in 2019. CSC and CIP will together lead the project through its construction phase with expected start of commercial operations in 2025.
“Since CSC and CIP initiated the discussion regarding a joint venture for Zhong Neng in 2017, the partnership between CSC and CIP has been highly successful, with both parties adding significant value to the project. CIP looks forward to continuing this partnership creating value for Taiwanese society, the local community, and our investors.” said Michael Hannibal, Partner in CIP.
Copenhagen Offshore Partners, which has been an integral part of the project organization through the successful development of Zhong Neng, will continue its involvement throughout the construction of the project.
MUFG and CTBC acted as joint Financial Advisors for the project debt financing. White & Case acted as legal advisor and Baker McKenzie as local legal advisor.
About Copenhagen Infrastructure Partners
Copenhagen Infrastructure Partners P/S (CIP) is a fund management company focused on energy infrastructure including offshore wind, onshore wind, solar PV, biomass and energy-from-waste, transmission and distribution, reserve capacity and storage, and other energy assets like Power-to-X. CIP has approximately 250 employees and offices in Copenhagen, Hamburg, New York, Tokyo, Utrecht, London, Melbourne and Singapore.
CIP manages eight funds and has approximately EUR 16 bn under management. PensionDanmark was the founding and sole investor in CI I. Today CIP’s funds have approximately 100 international institutional investors from the Nordics, Continental Europe, the UK, Israel, Asia, Australia, and North America and multi-lateral organizations such as the European Investment Bank. CIP was founded in 2012 by senior executives from the energy industry.
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