TOKYO -- The Japanese government and a unit of Mitsubishi Heavy Industries are working together on an offshore wind power project being planned in Taiwan.
Japan's three megabanks will extend loans for a contract under which MHI Vestas Offshore Wind, a joint venture between Mitsubishi Heavy and Danish wind power giant Vestas Wind Systems, will export wind turbines. Japanese government-affiliated Nippon Export and Investment Insurance, or NEXI, will provide trade insurance for potential losses on a portion of the loans. The partners hope to use the deal with Taiwan, which leads in offshore wind power, as a foothold for expansion elsewhere in Asia.
The project will build a wind power plant with a total output of 600,000 kilowatts off the coast of the western county of Changhua. The facility is slated to go online partially in 2022, with full output by 2024. The project is estimated to cost around 400 billion yen ($3.7 billion).
The loan contract is expected to be signed Wednesday. Three Japanese megabanks MUFG Bank, Sumitomo Mitsui Banking and Mizuho Bank, along with Deutsche Bank and HSBC, will jointly provide a total of nearly 100 billion yen in loans. NEXI will provide insurance coverage on up to 45 billion yen of loans. The coverage amount is believed to be one of the largest ever for renewable energy-related trade insurance in Japan.
Taiwan aims to raise its production of offshore wind power to 5.7 million kilowatts by 2025, compared with Japan's 2030 target of 800,000kW.
The Japanese government last June came up with an "infrastructure systems export strategy," in which it laid out a policy to promote export infrastructure exports in areas such as renewable and hydrogen power. It hopes Japanese companies develop technology and expertise through the Taiwan offshore wind project.
The market for offshore wind power is expected to grow worldwide. According to the International Renewable Energy Agency, offshore facilities will grow about tenfold from current levels to around 228 million kilowatts by the end of 2030. Europe has led the growth of offshore wind power, but Asia, where coal remains a major source of electricity, is expected to become the next big growth market.