PFI Taiwan and South Korea Offshore Wind Roundtable 2021

PFI Taiwan and South Korea Offshore Wind Roundtable 2021
3 min read

Welcome to the transcript of Refinitiv Project Finance International’s Taiwan and South Korea Offshore Wind virtual roundtable webinar event sponsored by MUFG and Linklaters.

The event, held last month, attracted a top range of speakers and a large audience. Offshore wind is one of the hottest sectors right now in the project finance arena and interest in the sector has taken off in East Asia. The roundtable combined commentary on the established market in Taiwan and a relatively new market, South Korea.

The offshore wind concept is now well established in East Asia. The opportunity is exciting and the market potentially very large. But with the opportunity comes challenges – optimum financing, regulatory issues, local construction issues and insurance, to name just a few. All were discussed during the event.

MUFG’s Gordon White set the scene for the discussion by stating: “When we talk about offshore wind in East Asia, we are really talking about the Taiwan market, the up-and-coming market in Japan, Korea is not far behind, and Vietnam, which is probably the next one on the list. Taiwan’s market has come a long way in a relatively short period of time and that’s the reason we can be very optimistic about other markets.”

Linklaters’ Joo Hee Lee agreed that Taiwan could provide a roadmap for the other markets. “We are looking at 15GW over the next 10 years in Taiwan and 12GW in Korea,” he said. “It will be very interesting to see how the market’s experience in Taiwan is going to play out in Korea.

Orsted’s Thomas Poulsen said: “What has happened in Taiwan’s offshore wind market is quite an incredible story” but added “it is not just a question of financing the projects but also building up the supply chain, which to some degree will include inexperienced suppliers.”

Linklaters’ Ying Fu set out the recent updates on Taiwan’s up-and-coming auction process, stating that in next round “there are clearly quite dramatic differences in the auction process” but adding: “There is recognition that the Ministry of Economic Affairs [MOEA] is recognising the challenges facing projects and appears to be doing something to address them.”

Korea Development Bank’s Ryan Shin detailed the opportunity and the hurdles in South Korea. “We have a very ambitious goal in front of us,” he said. “The government is really pushing hard on this, but the reality is that the market is not moving fast. It’s not just the number of decision makers involved in the various departments of central government but it’s the local governments, the community mayors.”

In terms of financing South Korean schemes, MUFG’s Gordon White said: “There are still a lot of questions in terms of how exactly the financings are likely to pan out and what role an international bank will play in that market. Will it be dominated by the Korean banks? Or will there need to be some sort of collaboration, with international banks and ECAs bringing knowledge of offshore wind?”

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