Allen & Overy advises Ørsted on the 605.2MW Greater Changhua 1 offshore wind project in Taiwan
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14 January 2021
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Allen & Overy has acted as legal adviser to energy company Ørsted (as sponsor) on the construction arrangements and sale (and related purchaser financing arrangements) of a 50% stake in the 605.2MW Greater Changhua 1 offshore wind project in Taiwan. This is a market-defining transaction for the offshore wind sector.
As part of the project, Ørsted sold a 50% stake in the Greater Changhua 1 Offshore Wind Farm to a consortium comprising global institutional investor Caisse de dépôt et placement du Québec (CDPQ) and Taiwanese private equity fund Cathay Private Equity. CDPQ will be the majority owner among the two new partners. The investors’ 50% stake in Greater Changhua 1 will be funded through a combination of equity and senior long-term debt facilities from 15 international and Taiwanese banks and two Taiwanese life insurance companies, as well as five export credit agencies providing lending and guarantees.
Ørsted will construct the Greater Changhua 1 Offshore Wind Farm under a full-scope EPC contract and will also provide long-term operation and maintenance (O&M) services from its O&M base at the Port of Taichung. The Greater Changhua 1 site is part of the 900MW Greater Changhua 1 & 2a Offshore Wind Farm, which Ørsted is currently constructing and expects to finalise in 2022. With a combined capacity of 900MW, the Greater Changhua 1 & 2a Wind Farms will be able to supply around 1 million Taiwanese households with green power.
The total sale price for the Greater Changhua 1 Offshore Wind Farm comprises the acquisition of a 50% ownership share and a commitment from the partners to fund 50% of the payments under the EPC contract for the wind farm, which includes both the generation and transmission assets. The total value of the transaction is approximately TWD75 billion (approx. DKK16 billion) which is to be paid during 2021 and 2022.
Jason Humphreys, Allen & Overy’s APAC Projects, Energy, Natural Resources and Infrastructure co-head and a partner based in Singapore, commented: “Ørsted’s Changhua 1 is genuinely a market-defining transaction and the Allen & Overy team is proud to be advising at the forefront of the transition to green energy in a new market yet again.”
Christopher Andrew, Allen & Overy Energy and Infrastructure partner based in London, commented: “We were very pleased to utilise our integrated global team, with combined expertise from Asia and Europe, to assist Ørsted in applying its partnership farm-down model in Asia Pacific for the first time, including the use of its market-leading EPC and operating structure to develop the project.”
The A&O team was led by energy and infrastructure partners Jason Humphreys in Singapore and Sheila Connell and Christopher Andrew in London, and included over 20 lawyers from a number of offices across APAC (including Singapore, Hong Kong, Thailand and Australia) and the UK.
Ørsted will construct the Greater Changhua 1 Offshore Wind Farm under a full-scope EPC contract and will also provide long-term operation and maintenance (O&M) services from its O&M base at the Port of Taichung. The Greater Changhua 1 site is part of the 900MW Greater Changhua 1 & 2a Offshore Wind Farm, which Ørsted is currently constructing and expects to finalise in 2022. With a combined capacity of 900MW, the Greater Changhua 1 & 2a Wind Farms will be able to supply around 1 million Taiwanese households with green power.
The total sale price for the Greater Changhua 1 Offshore Wind Farm comprises the acquisition of a 50% ownership share and a commitment from the partners to fund 50% of the payments under the EPC contract for the wind farm, which includes both the generation and transmission assets. The total value of the transaction is approximately TWD75 billion (approx. DKK16 billion) which is to be paid during 2021 and 2022.
Jason Humphreys, Allen & Overy’s APAC Projects, Energy, Natural Resources and Infrastructure co-head and a partner based in Singapore, commented: “Ørsted’s Changhua 1 is genuinely a market-defining transaction and the Allen & Overy team is proud to be advising at the forefront of the transition to green energy in a new market yet again.”
Christopher Andrew, Allen & Overy Energy and Infrastructure partner based in London, commented: “We were very pleased to utilise our integrated global team, with combined expertise from Asia and Europe, to assist Ørsted in applying its partnership farm-down model in Asia Pacific for the first time, including the use of its market-leading EPC and operating structure to develop the project.”
The A&O team was led by energy and infrastructure partners Jason Humphreys in Singapore and Sheila Connell and Christopher Andrew in London, and included over 20 lawyers from a number of offices across APAC (including Singapore, Hong Kong, Thailand and Australia) and the UK.