Northland and Gentari Finalise Hai Long Offshore Wind Deal

Business & Finance

December 29, 2023, by Adnan Durakovic

Northland Power has closed the transaction with Gentari International Renewables through which Gentari acquired 49 per cent of Northland’s ownership in the Hai Long offshore wind project located in Taiwan.

Northland now holds a 30.6 per cent ownership interest in the overall project and will continue to take the lead role in Hai Long’s construction and operation.

This transaction marks another milestone for the Hai Long offshore wind project after the recently announced debt financial close, with Gentari having contributed final equity consideration of approximately CAD 1 billion (EUR 682 million) and assuming its pro rata share of credit support for the project.

”Once completed, Hai Long will be the largest offshore wind project in Taiwan and will provide much needed clean energy to the grid and significant long-term, sustainable value to Taiwan’s economy. The project financing for Hai Long close in September was the largest in Taiwan and one of the largest globally. This completes Northland’s funding plan for the project, which is a huge milestone for the organization and is a testament to the value of the Hai Long project as an asset and the attractiveness of Taiwan as a market for green investment,” said Mike Crawley, President and Chief Executive Officer of Northland.

The proceeds from the transaction will be used to repay Northland’s previously disclosed CAD 500 million short-term corporate credit facility and fund Northland’s remaining equity in the project. As part of the broader strategic partnership with Northland in Taiwan, Gentari previously acquired 49 per cent of Northland’s ownership interest in its Taiwan Round 3 offshore wind projects in the summer of 2023.

”Bringing Gentari to the forefront of the offshore wind industry, this is an important milestone in our commitment to advancing renewable energy globally. This not only aligns with our vision for a sustainable future but positions Gentari as a valued clean energy solutions partner in driving change towards achieving net zero goals. It is not just a transaction; it’s a powerful step towards realizing our clean energy ambitions and contributing meaningfully to a cleaner tomorrow,” said Sushil Purohit, Chief Executive Officer of Gentari.

Hai Long’s total cost is projected to be approximately CAD 9 billion, with CAD 5 billion of the costs covered by non-recourse debt provided by the project lenders, approximately CAD 1 billion of pre-completion revenues derived during the project construction phase, and the remaining equity investment contributed by the project’s partners. Northland’s equity investment has been fully secured through funds raised under its at-the-market equity program in 2022 and with the completion of its partnership with Gentari.

Located approximately 45 – 70 kilometres off the Changhua coast in the Taiwan Strait, Hai Long consists of two phases, Hai Long 2 and Hai Long 3, with an expected combined generating capacity of 1,022 MW.

Hai Long 2A benefits from a 294 MW 20-year PPA with Taipower under a Feed-in-Tariff, and the 728 MW Hai Long 2B and 3 benefits from a 30-year Corporate Power Purchase Agreement (CPPA) with an investment grade counterparty.

Once operational, Hai Long will be one the largest offshore wind facilities in Asia, and will provide enough clean energy to power more than one million Taiwanese households including industrial facilities.

Hai Long Offshore Wind, a consortium comprising Northland Power, Yushan Energy from Singapore, Japan’s Mitsui & Co., Ltd., and now Gentari, expects to begin construction in 2024 and to commission the wind farms in 2025-2026.