Category A project supported: Greater Changua Offshore Wind, Taiwan

1. Project description

UK Export UK Export Finance has agreed to provide support to Greater Changhua Offshore Wind Farm SE Ltd for the development of the Changhua Offshore Wind Farm 1. This includes the design, construction and operation of an offshore wind farm, consisting of 75 wind turbine generators (WTG) and with a grid capacity of 605.2 MW, connected by cables to an offshore substation and an onshore substation which connect to a Taipower substation (‘the project’).

One of the main objectives of the project is to provide 605.2 MW of the total available network capacity of Changua.

The project includes:

  • Design
  • Construction
  • Operation and maintenance service

Other ACEs are EKF, Atradius, K-sure and KEXIM. HSBC is the lending bank

2. Project sector

The project is in the renewable energy sector.

The project is developed by Ørsted Wind Power A/S

4. UK exporters

Miscellaneous (e.g. Seajacks UK)

5. Export Credit Officers Bank

HSBC

6. Amount of UK export finance support

The main value of the backing is around £300m.

seven. OECD Common Approaches and Equator Principles

UK Export Finance has classified the project as Category A, i.e. it has potentially significant environmental, social and human rights (ESHR) impacts in accordance with the 2012 definition (revised in 2016) of the OECD Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “OECD Common Approaches”) and the Equator Principles (2020 ).

As required by the OECD Common Approaches, UK Export Finance has disclosed its possible involvement in the project. A notification was posted on the UK Export Finance website on February 18, 2021, which directed interested parties to the contact from which published information on the ESHR can be obtained. UK Export Finance received no comments from interested parties.

ERM has been commissioned to undertake an independent environmental and social due diligence study on behalf of the lenders/ACE group,

8. Environmental, social and human rights standards

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

The applicable IFC PSs were:

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

The applicable World Bank Group EHS guidelines were:

  • General EHS Guidelines (2007);
  • EHS Guidelines for Wind Energy (2015);
  • EHS Guidelines for Electricity Transmission and Distribution (2007)
  • IFC/EBRD Guidance Note on Worker Housing: Processes and Standards.

9. Nature of ESHR impacts

The review of potential ESHR risks and impacts considered the following impacts, receptors and issues during the construction and operation phases of the project:

  • health and security
  • waste and hazardous materials management
  • marine habitats
  • emergency planning and response
  • construction camp conditions
  • grievance mechanisms
  • conditions of the employment contract
  • community involvement

ten. ESHR impact assessment

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

ERM was appointed IESC with a duty of care to lenders and was tasked with undertaking an ESDD assessment of the project. The report served as the basis for UKEF’s assessment of the project’s alignment with relevant compliance and monitoring standards and recommendations.

The review included:

  • ERM visited the Project sites on August 26, 2020 and September 3, 2020;
  • The desk review of project-related documentation includes, but is not limited to: the 2018 Environmental and Social Impact Assessment Report, the August 2020 Environmental and Social Management Plans, and the Engagement Plan stakeholders.
  • Follow-up meetings and interviews with relevant project representatives.

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

Based on the review, the project was found to be likely to cause a number of adverse environmental and social impacts both during construction and operation. However, a series of controls proposed as part of the Project’s environmental and social management systems should facilitate the management of these impacts.

11. Climate Change Considerations

UKEF has considered the potential direct and indirect greenhouse gas (GHG) emissions from the project and the effects of climate change factors on the project as part of its ESHR review.

The project is not considered a carbon-intensive business (such as fossil fuels or petrochemicals) and therefore has “high” GHG emissions exceeding relevant quantification and reporting thresholds set by international standards were not reasonably contemplated.

The review revealed that the project design took into account the potential physical impacts of climate change, such as changes in rainfall and weather patterns.

12. Decision

Various actions have been agreed between the project promoter, the operator and the parties involved in the financing, which are necessary to ensure the continued alignment of the project with international standards. Following agreement on these commitments, it was concluded that the project should adhere to relevant international standards throughout the project cycle. UKEF has therefore decided to support the supply of goods and services by UK exporters to the project.

A condition of the support is that the project will be subject to monitoring and reporting to ensure that the project is aligned with relevant international standards throughout the duration of the support.

UK export finance

December 8, 2022