Ørsted will construct the Greater Changhua 1 offshore wind farm. Credit: Nicholas Doherty on Unsplash.

Danish power company Ørsted has signed an agreement to divest 50% ownership stake in its 605MW Greater Changhua 1 Offshore Wind Farm in Taiwan to Quebec’s Caisse de dépôt et placement du Québec (CDPQ) and Taiwanese private equity fund Cathay PE.

Among the two new partners, CDPQ will be acquiring a majority stake in the offshore wind farm.

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CDPQ executive vice-president and infrastructure head Emmanuel Jaclot said: “This investment in Taiwan, which represents an attractive market for CDPQ, allows us to further diversify our presence in Asia.

“As an investor with vast experience in renewable energy, we seek this kind of greenfield opportunity to contribute to the transition towards a low‑carbon economy.

“Working alongside our long-term partner, Ørsted, and experienced local investor, Cathay PE, we are proud to support the Greater Changhua 1 Offshore Wind Farm project, which will supply clean power to over 650,000 Taiwanese families.”

As per the terms of the agreement, the two partners will acquire 50% stake in the wind facility besides funding 50% of the payments under the engineering, procurement, and construction (EPC) contract, which encompasses the generation as well as transmission assets.

The total value of the transaction is for approximately TWD75bn ($2.6bn), which will be paid during 2021 and 2022.

Under the EPC contract, Ørsted will construct the Greater Changhua 1 Offshore Wind Farm as well as provide long-term operations and maintenance (O&M) services from its O&M base at the Port of Taichung.

Ørsted Offshore executive vice-president and CEO Martin Neubert said: “I’m delighted to welcome our long-term partner CDPQ and Cathay PE in Greater Changhua 1. It’s encouraging to once again see institutional investors playing an important role in the transition to renewable energy and low-emission economies.

“Today’s announcement also marks a milestone in successfully applying our partnership farm-down model in Asia-Pacific for the first time.”

To fund this acquisition, the investors will be using a combination of equity and senior long-term debt facilities from 15 international and Taiwanese banks and two Taiwanese life insurance companies, with five export credit agencies providing lending and guarantees.

Completion of the divestment is subject to regulatory approval from the Taiwanese authorities.

Greater Changhua 1 site is part of the 900MW Greater Changhua 1 & 2a Offshore Wind Farm, which is currently being constructed by Ørsted and is expected to be ready in 2022.

Once operational, Greater Changhua 1 & 2a will be able to supply renewable energy to nearly one million Taiwanese households.

Last month, Ørsted announced that it intends to develop South Korean offshore wind projects off the coast of Incheon City, with a potential capacity of up to 1.6GW.