Northland Power secures financing for Taiwanese Hai Long OWF

Northland Power Inc. has announced that its Hai Long offshore wind project in Taiwan has signed a credit agreement to secure 118 billion New Taiwan Dollars long-term over 20 year non-recourse financing (equivalent of $5 billion CAD). 

The non-recourse project financing will be provided by over 15 international and local lenders with support from multiple Export Credit Agencies (ECAs) from six different countries. The project is expected to reach financial close shortly, upon satisfaction of all relevant conditions precedent to the financing being achieved. 

“Today’s announcement is a major achievement for Northland, our partners, and the offshore wind industry, globally and in Taiwan,” said Mike Crawley, President and Chief Executive Officer of Northland. “We are progressing yet another world-class offshore wind project despite a challenging market environment. 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.”

Hai Long’s total cost is projected to be approximately $9 billion, with funding from its $5 billion of non-recourse debt by the project lenders, approximately $1 billion of pre-completion revenues, and the remaining equity investment contributed by the project’s partners. 

“This financing is Northland’s first in Asia and, once closed, will be the largest non-recourse offshore wind project financing to date in the region,” said Pauline Alimchandani, Northland’s Chief Financial Officer. “We would like to thank the project team, our partners, and all the financial and capital providers for working together to achieve this significant milestone. Once operational, Hai Long is expected to provide significant, long-term contracted Adjusted EBITDA and Free Cash Flow to our business and shareholders.”

Northland’s interest in Hai Long is expected to generate a five-year average of approximately $230 to $250 million of Adjusted EBITDA (a non-IFRS measure)4 and $75 to $85 million of Free Cash Flow (a non-IFRS measure)4 per year once operational, delivering significant long-term value for Northland’s shareholders. 

Hai Long is located approximately 45 – 70 kilometers off the Changhua coast in the Taiwan Strait and consists of two phases, Hai Long 2 and Hai Long 3, with an expected combined generating capacity of 1,022 MW. Hai Long 2A was awarded up to 300 MW of grid capacity under a Feed-in-Tariff, while Hai Long 2B and 3 were awarded up to 744 MW of grid capacity in Taiwan’s first competitive price-based auction in 2018. Hai Long subsequently signed a CPPA for the 744 MW auction portion in 2022. The project has obtained all environmental approvals and its major construction permit and has commenced with early construction work and fabrication for components. Completion of construction activities and full commercial operations are expected in 2026/2027. In addition, the project secured a 15-year operations and maintenance agreement with the turbine supplier, with options to extend.

Hai Long will play an important role in helping the Government of Taiwan achieve its renewable energy target of 15 GW of offshore wind to be constructed between 2026 and 2035. Once operational, Hai Long will be one the largest offshore wind facilities in Asia, and provide enough clean energy to power more than one million Taiwanese households.