Corporate power purchase agreements heat up, DBS deploys renewable energy financing in Taiwan

Asia's iconic energy event "Taiwan International Smart Energy Week and Taiwan International Net Zero Sustainability Exhibition" debuts today. DBS Bank (DBS) serves as the largest financial sponsor of this exhibition. Kelvin Wong, CEO of DBS Group, visited Taiwan for the first time after taking office and was invited to deliver a keynote speech, emphasizing that innovative and diversified financial services are a key force in promoting a resilient energy transformation and enhancing industrial competitiveness.

Huang Weixiong said that in the face of the continued expansion of the scale and investment needs of energy projects with more complex structures, the role of financial institutions has also continued to evolve in response to market development. DBS Bank combines Asia’s cross-market experience with Taiwan’s renewable energy market performance, further extending from a capital provider to a capital integrator and innovative transaction structure designer. Through financial advisory, project financing, risk allocation and other professional services, it connects developers, suppliers, financial institutions and investors, allowing capital to be invested more effectively, and continues to provide the key financial support needed for Taiwan’s renewable energy transformation.

The International Energy Agency (IEA) estimates that global electricity demand will grow at an average annual rate of 3.6% from 2026 to 2030, with nearly 80% of new demand coming from emerging and developing economies. Focusing on Taiwan, the rapid development of semiconductors, AI, and data centers is creating new structural electricity demand. The Ministry of Economic Affairs estimates that Taiwan’s electricity demand will grow at an average annual rate of approximately 2.5% from 2026 to 2035, which is the second highest forecast in history. Facing the continued growth of industrial electricity consumption, Taiwan must not only expand the capacity of clean energy installations, but also simultaneously strengthen the power grid, energy storage and flexible power generation to take into account power supply stability and energy resilience.

Huang Weixiong pointed out that as the demand for green power from enterprises continues to rise, it has also driven the rapid development of the "Corporate Power Purchase Agreement" (CPPA) market. Long-term "Corporate Power Purchase Agreements" provide long-term and predictable income for large-scale renewable energy projects through stable power purchase commitments, helping to reduce market risks and improve project financing feasibility. With Taiwan's carbon fee system on the way, carbon pricing has further strengthened the economic incentives for companies to transition to energy.

He mentioned that DBS Bank (Taiwan) has participated in different development stages of Taiwan's renewable energy market, from early financing of Taiwan's first offshore wind farm "Ocean Wind Power" to serving as an equity financial advisor and successfully introducing international strategic investors; and later participated in Taiwan's largest "Ocean Wind Power" "Hailong Offshore Wind Power" assisted in assessing the feasibility of financing, planning risk allocation, and with the support of 7 export credit agencies, it facilitated a large-scale project financing totaling NT$118 billion with a term of 21.5 years; it was also Taiwan's first 100% corporate power purchase For offshore wind power projects where the agreement is the basis of income, we serve as the coordinating bank, quota management bank and hedge bank, using financial expertise such as financing arrangements, capital management and risk management to assist in the completion of NT$33.9 billion in financing; we have recently continued to participate in Taiwan's offshore wind power projects. The first refinancing case of electricity "Haineng Wind Power" and "Hailong Offshore Wind Power" refinancing case; it also spans different renewable energy technologies. In addition to project financing consultants, it also organizes financing for grid-connected terrestrial solar energy, floating solar energy, indoor and outdoor fishing power, photovoltaic combined energy storage systems, etc.

In addition, in 2020, DBS Bank established a one-stop management banking team (Agent Desk) in Taiwan in response to the development of renewable energy. From quotas, collateral, account management to inter-bank coordination of joint loans, the local team in Taiwan can provide complete services. This forward-looking layout reflects DBS Bank’s long-term commitment to the Taiwan market and its commitment to supporting the energy transition. It combines its experience in large-scale projects in Asia with local execution capabilities to respond to the increasingly complex financial needs of energy projects.