EnergyOMNI's Perspectives I GWEC COP30 Report: Key Features for Bankable Offshore Wind Projects

Edited by EnergyOMNI

During COP30, the Global Wind Energy Council (GWEC) released a report titled "Innovative Finance Mechanisms for Southeast Asia's Offshore Wind Take-off." The report focuses on offshore wind financing, with particular attention to two emerging offshore wind markets in the Asia-Pacific region: the Philippines and Vietnam. It offers recommendations on how emerging markets can build investment environments that support bankable offshore wind projects.

Over the past two decades, global offshore wind capacity has made strides over the past two decades, increasing from 2.5 GW in 2010 to 83 GW by the end of 2024.

According to GWEC's data, 2021 saw record growth, with 21.1 GW of new capacity installed. Among currently operational capacity worldwide, 55.6% (46.3 GW) comes from Asia Pacific region and 43.3% (36 GW) from Europe. Growth in the Asia-Pacific region has been driven largely by China, which added 4 GW of new capacity in 2024 alone, bringing its cumulative installed capacity to 41.8 GW.

The report places particular focus on two emerging offshore wind markets in the Asia-Pacific region: the Philippines and Vietnam. GWEC provides recommendations for key actors in these markets, including governments, developers, development finance institutions (DFIs), multilateral development banks (MDBs), and export credit agencies (ECAs), to help build more bankable project conditions and advance offshore wind market development.

Earlier in September, GWEC published "Financing the Offshore Wind Revolution: Risk-Sharing Mechanisms for a Sustainable Energy Future in the Philippines," offering financing and risk-sharing recommendations ahead of the Philippines" upcoming offshore wind auction (GEA-5). In 2024, it released the "Vietnam Offshore Wind Competitive Investor Selection Study," which proposed a two-stage auction design and bankable power purchase agreements. The new COP30 report can be viewed as a synthesis of GWEC's policy advocacy efforts in the Philippines and Vietnam over the past several years.

In the COP30 report, GWEC stated that when offshore wind projects are considered bankable, both domestic and international partners are poised to invest in offshore wind projects. The key features of a bankable offshore wind project can be grouped into two categories: macro-level features and deal-level features.

Macro-level features include planned or completed physical infrastructure required for offshore wind (ports, grids, etc.), a developed supply chain, a clear and transparent national policy on offshore wind, and a viable market mechanism that enables competitive price determination.

Deal-level features encompass financial and non-financial terms. Financial terms include clear off-take arrangements, long-term power purchase agreements (PPA), competitive tariffs, commercial capital (debt and/or equity), robust risk-sharing mechanisms, and currency indexation, as appropriate. Non-financial terms include having a developer with good track record, creditworthy offtaker, and features like step-in rights for banks.

Sourced: GWEC