“This is creating opportunities for investors to back projects with demonstrable climate benefits and spurring the transition to a low-carbon economy,” says Rasmus Skov, Head of Sustainability at Ørsted. “A world that runs entirely on green energy is a key battle to win the fight against uncontrollable climate change.”
Taiwan, for instance, has set ambitious renewable energy targets. In 2018, the Taiwan government contracted Ørsted, the world’s leading offshore wind developer, to build the 900MW Greater Changhua 1 & 2a offshore wind farms, off the country’s west coast. These wind farms are big enough to supply around one million Taiwanese households with clean power.
Low-risk route to renewables
“Taiwan is eager to expand its share of renewable energy. The country’s financial institutions want to be a part of that green transition, but up until now there have been limited opportunities to get directly involved in offshore wind. The financing of Ørsted’s offshore windfarms offers a simple and transparent opportunity for local banks, which will ultimately help to secure clean power for local consumers,” says Kasper Kiim Jensen, Senior Director of Treasury & Funding at Ørsted.
To draw sustainable finance into the Changhua projects, Ørsted launched a green loan facility
worth NTD 25 billion (USD 800 million). The facility has proven popular and attracted funding from 15 local and international banks, eight of which are state owned banks that are financing offshore wind for the first time.
The facility enables Ørsted to withdraw or repay amounts as needed for construction of the Changhua projects, providing greater flexibility than traditional lending models. Drawing loans in local currency helps guard against volatility in the Taiwanese dollar, reduces complexity and lowers Ørsted’s overall risk.