Notice

Category A project supported: Greater Changhua 4 (Northwest) Offshore Windfarm

Published 2 June 2025

1. Project description

UK Export Finance has agreed to provide support to Cathay Wind Power Co Ltd (the Borrower) in respect of construction services/equipment for the Greater Changhua 4 (Northwest) Offshore Windfarm with a grid capacity of 583MW. This involves the design, construction and operation of an offshore windfarm in the Formosa Strait off the western coast of Taiwan. The project consists of 42 wind turbine generators, which will be connected via an offshore substation, subsea cabling and an onshore substation connecting to a separate Taiwan Power Company operated substation for wider grid connection.

A key aim of the Project is to provide renewable power to Taiwan’s energy system.

The Project includes:

• 42 x 14MW capacity Offshore Wind Turbine Generators;
• Offshore Substation and 66KV transmission system;
• 2 x 230 KV subsea export cables each 54.2km in length;
• Onshore Substation and Connection to Grid; and
• Construction and Operation & Maintenance facilities.

Other Export Credit Agencies involved in supporting the Project include Export Finance Australia, Export and Investment fund of Denmark, Credendo of Belgium and K-Sure of Korea. There are also numerous commercial lenders involved in the transaction.

2. Project sector

The Project is in the Renewable Energy sector.

3. Project sponsors

The Project is being developed by Greater Changhua Offshore Wind Farm NW Ltd which has been established as Project Company and will act as the asset owner. This Project Company has two key shareholders, Ørsted Wind Power TW Holdings A/S and Cathay Wind Power Co. Ltd.

4. UK exporters

UK content will be provided by Seajacks, providing a vessel for installation and CRP Subsea, providing cabling. There is potential for more from other sub-contractors as the Project progresses.

5. Export Credit Agent Bank

The Hong Kong and Shanghai Banking Corporation Limited, Singapore Branch as facility agent, supported by CTBC Bank Co Ltd, Taiwan as local paying agent.

Credit Agricole Corporate and Investment Bank, Hong Kong Branch as Intercreditor Agent.

6. Amount of UK Export Finance support

The maximum liability of the support is approximately £245 million.

7. OECD Common Approaches and Equator Principles

UK Export Finance categorised the Project as Category A i.e. having potentially significant environmental, social and human rights (ESHR) impacts in accordance with the definition in the Organisation for Economic Co-Operation and Development (OECD) Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (“Common Approaches”), OECD/LEGAL/0393, and the Equator Principles (2020).

As required by the OECD Common Approaches, UK Export Finance disclosed its possible involvement in the Project. A notification was posted on the UK Export Finance web site on 11 March 2024, which directed interested parties to the contact from where published ESHR information can be sourced. UK Export Finance did not receive any comments from interested parties.

ERM Hong Kong Ltd was commissioned by Ørsted Wind Power TW Holdings to undertake an independent environmental and social due diligence review on behalf of the Lender group/ECAs.

8. Environmental, social and human rights standards

Project related ESHR documentation was reviewed for their alignment against the 2012 International Finance Corporation (IFC) Performance Standards (PS) on Environmental and Social Sustainability and the World Bank Group Environmental, Health and Safety (EHS) Guidelines.

The applicable IFC PS were:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts;
• PS2: Labour and Working Conditions;
• PS3: Resource Efficiency and Pollution Prevention;
• PS4: Community Health, Safety and Security;
• PS5: Land Acquisition and Involuntary Resettlement;
• PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; and
• PS8: Cultural Heritage.

The applicable World Bank Group EHS Guidelines were:

• General EHS Guidelines (2007);
• Guidelines for Wind Energy (2015); and
• Guidelines for Transmission Lines (2007).

9. Nature ESHR impacts

The review of potential ESHR risks and impacts took into account the following impacts, receptors and issues during the construction and operational phases of the Project:

• health and safety;
• emissions to the atmosphere (including land, air and water);
• social and community impacts;
• marine habitats;
• biodiversity, particularly migratory birds;
• emergency planning and response;
• grievance mechanisms;
• worker conditions of contract; and
• community engagement.

10. Assessment of ESHR impacts

A review was undertaken in line with the requirements of the OECD Common Approaches and Equator Principles to identify potential ESHR risks and impacts of the Project and how these would be effectively managed.

ERM Hong Kong Ltd was appointed as the Independent Environmental and Social Consultant (IESC) with a duty of care to the Lenders and were commissioned to undertake an ESDD assessment of the Project. The report formed the basis for UKEF’s evaluation of the Project’s alignment with the relevant standards and recommendations for compliance and monitoring.

The review included:

• A site visit undertaken by the IESC and various ECAs/Lenders (including UKEF) in October 2023;
• Desk-based review of project-related documentation: Environmental and Social Impact Assessment, Environmental and Social Management Plans, and Stakeholder Engagement Plan; and
• Follow-up meetings and interviews with relevant Project representatives.

The results of this review formed the basis for the evaluation of the Project’s alignment with relevant international standards, and recommendations for future compliance and monitoring.

Taking account of the review, the Project was deemed to have potential to cause a number of adverse environmental and social impacts both during construction and operation. However, a proposed suite of controls as part of the Project’s environmental and social management systems should facilitate the management of these impacts.

11. Climate change considerations

UKEF considered the potential direct and indirect green house gas (GHG) emissions of the Project and effects of climate change factors on the Project as part of its ESHR review.

The Project will reduce Taiwan’s reliance on coal and nuclear power for the generation of electricity, and consequently help it to meet its climate change reduction goals.

The Project is not considered to be a carbon intensive undertaking (such as fossil fuels or petrochemical) and “high” GHG emissions in excess of relevant thresholds for quantification and reporting set by international standards were reasonably not envisaged.

The review revealed that the Project design has considered potential physical impacts of climate change such as changes to rainfall and weather patterns.

12. Decision

Various actions have been agreed between the Project developer, operator, and parties involved in the financing, which are necessary to ensure the Project’s on-going alignment with international standards. Following agreement of these commitments, it was concluded that the Project should meet the relevant international standards over the Project cycle. UKEF has therefore decided to provide its support in respect of the supply of goods and services by UK exporters to the Project.

A condition of support is that Project will be subject to monitoring and reporting in order to provide satisfaction that the Project is aligned with the relevant international standards throughout the duration of support.