Friday, 22 January 2021

Deutsche Bank closes hedge for offshore wind farm

Deutsche Bank announced that it successfully closed a deal contingent interest rate swap on its $3 billion (TWD 90 billion) project finance for the development of a 589 MW offshore wind farm on the coast of Changhua County, Taiwan.  

Cynthia Chan, country chief and head of investment and corporate banking at Deutsche Bank in Taiwan, said, “Deutsche Bank is pleased to have successfully closed this deal contingent interest rate swap during extremely volatile market conditions.”

The investment consortium, led by Copenhagen Infrastructure Partners (CIP), through its funds CI II and CI III with two Taiwan life insurers, closed the largest ever wind farm project finance in Taiwan at the end of February. 

Deutsche Bank’s global co-head of transportation, infrastructure and energy origination Dominik Thumfart said, “Deutsche Bank is pleased to provide finance and a sophisticated structuring solution to support CIP’s participation in the rapid development of Taiwan’s renewable energy industry.”   

Deutsche Bank is the sole pre-hedging and sole hedging coordinator for a deal contingent hedge on the project finance, and this is the second deal contingent interest rate swap transaction that was delivered by the bank for the wind farm project in Taiwan. The bank is also among the 25 banks in the syndicate group of lenders.

The bank broke new ground for the Yunlin project in 2019, arranging and syndicating the world’s first deal contingent hedge on project finance to support investment into Taiwan’s nascent renewable energy sector. The structure won three highly respected Deal of the Year awards.

“Collaboration across geographies and product groups between teams in Asia and Europe enabled Deutsche Bank to offer integrated risk management and financing solutions through our global credit trading-infrastructure and energy, structured export finance and risk solutions,” Thumfart added.

Deutsche Bank’s head of sustainability and special situations of group Asia, Rahul Jain, attributes these successes in managing complex risk solutions to the bank’s culture for innovation and pan-regional structuring expertise. 

“Seamless teamwork across our corporate and investment banks, across both product groups and geographies, enabled the successful delivery of this comprehensive and innovative risk solution for our client,” Jain said.    

The Changfang and Xidao wind farm project off the coast of Changhua County is the latest wind energy project in Taiwan’s emerging renewables sector that has attracted foreign investors in the transition to renewable energy.  

“Deutsche Bank is extremely proud to deliver this innovative risk solution, particularly as it supports European investment in Taiwan’s emerging renewable energy industry. The next decades will see significant change as industries and economies transition for a low carbon world, and Deutsche Bank is pleased to play a role in supporting Taiwan’s journey to renewable energy,” Cynthia Chan added.

This transaction follows the bank’s first and award-winning deal contingent hedge for a German wind farm developer in Taiwan in 2019. Deutsche Bank also led the market with Taiwan’s first green bond in Taiwan dollars for foreign corporate issuer, Ørsted. 

This 2020, Deutsche Bank celebrates its 40 years in Taiwan, where it holds an onshore licence and actively supports the development and deepening of Taiwan’s capital markets. The bank proudly pioneered the opening of Taiwan’s Formosa bond market, where it continues to lead with foreign issuance.

Re-disseminated by The Asian Banker

Diary of Activities