Canadian power producer Northland Power Inc. and Japan-based Mitsui & Co. have announced their final investment decision on the $6.5 billion Hai Long Offshore Wind Power Project in Taiwan.
The ambitious project will involve the construction of 73 large wind turbines located 45-70 kilometers offshore Changhua County on the west coast of Taiwan. The project is divided into three sections: HL2A, HL2B, and HL3, with a total generation capacity of 1,022 MW, enough to power 1 million households in Taiwan.
Power will be supplied under long-term power purchase agreements, including a 20-year PPA with Taiwan Power Company for HL2A and a second private power user in Taiwan under a 30-year PPA for HL2B and HL3. The project is scheduled to start operations in end of 2025 and ramp up to full capacity in 2027.
The Hai Long Offshore Wind Power Project is being developed as a joint venture between Northland (60 percent) and Mitsui (40 percent), and mark’s Northland’s first offshore wind project in Asia and fifth overall.
With an estimated total cost of around US $6.5 billion (CAD 9 billion), financing will be provided by various international institutions, including export credit agencies and financial institutions from around the world. Northland says it has secured all necessary equity funding for the project. Mitsui’s investment, loan, and guarantee amount will be approximately $175 billion (JPY 260 billion). Northland announced the closing of a $3.7 billion (CAD $5 billion) credit facility for the project earlier this week.
“We are progressing yet another world-class offshore wind project despite a challenging market environment,” said Mike Crawley, President and Chief Executive Officer of Northland. “The project will produce high quality and stable cashflow over a 30-year period with further optimization opportunities. Offshore wind is necessary to meet global renewable energy demand in the years ahead and Northland is one of the few companies able to originate, develop, finance, construct, and operate such facilities.”
Taiwan is looking to install 40-55 gigawatts (GW) of offshore wind capacity, including 15 GW by 2035, as part of its ambition of achieving of net zero greenhouse gas emissions by 2050 and reduce its dependence on energy imports.
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