Danish firm to invest $5 B for offshore wind projects

Copenhagen Infrastructure New Markets Fund (CINMF), an affiliate of Danish fund manager Copenhagen Infrastructure Partners (CIP), will be investing $5 billion to for the commercial development of three  greenfield offshore wind farm projects that could bring in 2,000 megawatts of additional power capacity in the country by 2028.

The Danish firm stands as the first ‘brave soul-investor’ that will be the testing the water for the newly opened 100-percent ownership of foreign firms in the renewable energy (RE) investment terrain of the Philippines.

The three service contracts will have 25-year life effective on their signing date with the Department of Energy (DOE) which is March 30 this year.

According to Przemek Lupa, associate partner in CINMF, the offshore wind ventures will cover the planned 1,000MW project in San Miguel Bay along the stretch of the Camarines Sur and Camarines Norte provinces in the Bicol region; 650MW in Samar; and 350MW in Dagupan, Pangasinan.

In terms of project execution, he indicated that “our target is to deliver these projects within the tenure of this administration to the extent that we can…we can look at achieving COD (commercial operations date) by 2028, which means starting construction a couple of years earlier, that is the goal.”

Lupa qualified though that the timelines shall largely depend on the permitting processes with relevant government agencies and the approval of the system impact study (SIS) for the grid integration of the OSW plants’ generated capacities.

Diverging from the typical run of fund managers, the CINMF executive emphasized that their commitment into these projects will be for the CIP group to position as “truly active developers…so we really put our hands in the dirt; and we manage the construction and we do the development.”

At implementation phases, Energy Secretary Raphael P.M. Lotilla highlighted that the projects would be providing 4,500 green jobs – and that shall stretch from the development and operations period of the facilities. Their generated capacity can also power up roughly 1.0 million households while displacing 2.0 million tonnes of carbon dioxide (CO2) that could have otherwise been spewed into the atmosphere.

He expounded that the newly signed service contracts with CINMF “represent an additional strategic investment and a firm commitment to strengthen the renewable energy sector in the country, particularly the development of OSW.”

In the energy chief’s belief, this undaunted Danish investor “will be bringing in financial muscle and technological heft and will be working with Filipino partners throughout the construction and operation phases,” adding that through the development cycles of the projects, the sponsor-firm “will work with the various coastal host communities in enhancing the local livelihood opportunities and environmental protection.”

Lotilla added these clean energy investments “provide a significant contribution towards a low carbon future as well as encourage the development of the local supply chain.”

Danish Ambassador to the Philippines Franz-Michael Mellbin similarly stated that “cutting red tape” – primarily on permitting of energy projects – is one major concern that Danish investors have been batting for with the DOE and the whole government under the Marcos administration.

And for the capital influx from the Danish investor on these three OSW projects, the envoy specified that “the Filipino people deserve more reliable and cheaper electricity.”

He thus asserted that Denmark takes pride as “the first country to be part of a fully foreign-owned wind farm in support of the Philippine renewable energy transition,” as he emphasized that  “the Philippines and the Danish governments have long-standing cooperation in the development of wind power in the country.”

To date, the energy department already awarded 57 offshore wind service contracts that could yield potential capacity addition of  42,000MW in the country’s medium- to long-term power supply.