Insurance company steps in: Ørsted closes sale of 50 percent stake in offshore wind farm in Taiwan
Fredericia, Denmark - Ørsted announced in February 2024 that it is accelerating its divestment program to generate proceeds as part of the company's strategic focus. In Taiwan, the Danish offshore specialist has now brought the Taiwanese insurance company Cathay Life Insurance on board as an investor.
Ørsted retains 50 percent of the shares and takes over construction as well as operation and maintenance services
Ørsted will continue to hold the remaining 50 percent of the shares in the Greater Changhua 4 offshore wind farm after the transaction of 50 percent of the shares in the wind farm. The total sale price for the Greater Changhua 4 offshore wind farm includes the acquisition of a 50 percent ownership interest and the partners' commitment to finance 50 percent of the payments under the EPC contract for the wind farm. According to Ørsted, the total value of the transaction amounts to approximately DKK 11.6 billion (approx. EUR 1.56 billion) to be paid in 2024 and 2025.
The agreement also stipulates that Ørsted will construct the Greater Changhua 4 offshore wind farm under a comprehensive EPC contract and provide long-term operation and maintenance (O&M) services from its O&M hub in the port of Taichung.
The Greater Changhua 4 offshore wind farm site is part of the 920 MW Greater Changhua 2b and 4 offshore wind farm complex. Ørsted is building the offshore farms, which are scheduled for completion by the end of 2025.
“We’re pleased to apply our partnership model in Asia Pacific once again and advance the development of offshore wind in the region with Cathay, with whom we have great collaboration experience. We’re satisfied with the transaction as it represents another important milestone in our partnership and divestment programme and ensures further progress towards our mid- and long-term targets”, Rasmus Errboe, Deputy CEO and Chief Commercial Officer at Ørsted, comments on the deal.
“This investment underscores our dedication to supporting the government's renewable energy transition while simultaneously generating stable, long-term returns that align with the investment goals of the insurance sector”, adds Andrew Liu, President of Cathay Life Insurance.
About the Greater Changhua offshore cluster
Greater Changhua 4 is currently under construction together with Greater Changhua 2b, which is wholly owned by Ørsted. The total capacity of 920 MW of Greater Changhua 2b and 4 is covered by a 20-year power purchase agreement with the Taiwanese semiconductor company TSMC.
The Greater Changhua 2b and 4 offshore wind farms are located next to the 900 MW Greater Changhua 1 and 2a wind farms, which are already in operation. The 605 MW Greater Changhua 1 offshore wind farm is co-owned by Ørsted (50 percent) and the Caisse de dépôt et placement du Québec (CDPQ) and Cathay PE, which together hold a 50 percent stake.
According to Ørsted, the 1.82 GW Greater Changhua offshore wind cluster can generate enough electricity to supply almost two million Taiwanese households.
Share cannot benefit
According to Ørsted, the deal with Cathay Life Insurance will have no impact on the financial forecast for the 2024 financial year.
Ørsted's share price was unable to benefit from the completion of the transaction yesterday, with the RENIXX Group share losing 3 percent to EUR 45.56 (closing price, 16.12.2024, Stuttgart Stock Exchange). Compared to the turn of the year, the share is down 9.1 percent.
Source: IWR Online, 17 Dec 2024
