Formosa 2 Sets Benchmark for Offshore Wind Refinancing in Asia Pacific

As Asia Pacific accelerates its transition to low-carbon energy systems, offshore wind has emerged as a critical pillar of Asia Pacific’s renewable energy mix, supporting large-scale and stable power generation.

The successful USD1.8 billion refinancing of Taiwan’s Formosa 2 offshore wind project marks a significant milestone representing Asia’s first post-commercial operations date (COD) offshore wind refinancing and setting a benchmark for future transactions in the region.

The successful USD1.8 billion refinancing of Taiwan’s Formosa 2 offshore wind project marks a significant milestone representing Asia’s first post-commercial operations date (COD) offshore wind refinancing and setting a benchmark for future transactions in the region.

– Raphael Chabrolle, Head of Renewables Advisory, SMBC Asia Pacific

Project Finance for Social and Affordable Housing

Located in the Taiwan Strait with a total generation capacity of 376MW, the project initially financed under a USD 2 billion non-recourse financing and was completed in September 2023.





In 2026, led by Sumitomo Mitsui Banking Corporation (SMBC) as sole financial adviser, the USD 1.8 billion refinancing was oversubscribed by over 180% – underscoring strong demand for operational offshore wind assets and the increasing availability of long-term capital for sustainable infrastructure in Asia.

As noted by the deal team, “This strong demand reflects rising investor confidence in operational offshore wind projects, alongside deeper liquidity for sustainable infrastructure across APAC.”

How SMBC delivered as a trusted solutions provider:

Balancing sponsor returns and lender priorities


The refinancing was structured to balance the interests of both sponsors and lenders. Key enhancements included a five-year extension of loan tenor, margin reduction, improved debt sizing, and the replacement of cash-funded reserve accounts with a Debt Service Reserve Letter of Credit (DSR LC).

Combined with a balanced mix of Export Credit Agency (ECA) covered and uncovered facilities, these measures improved capital efficiency and sponsor returns while maintaining lender confidence in a project with over two years of proven operational performance.

The transaction also required careful navigation of an evolving lender landscape and innovative structuring solutions, including revised decommissioning arrangements and the introduction of the DSR LC.

Growing role of domestic liquidity


“A defining feature of the transaction was the significant increase in participation from Taiwanese financial institutions.”

– Julia Tong, Director, Structured Finance Department Asia Pacific, SMBC.




Domestic banks accounted for more than half of total commitments – up from 27% in the original 2019 financing to 66% in 2026.

This reflects the growing depth and capability of Taiwan's banking sector to support large-scale renewable infrastructure and highlights a broader shift in the financing landscape, where domestic liquidity is playing an increasingly central role in supporting operational assets.

Shaping the next phase of renewable energy financing in Asia Pacific


The Formosa 2 refinancing highlights the evolution of a more dynamic and efficient renewable energy financing ecosystem in the region. As domestic financial markets continue to deepen, Taiwan is emerging as a benchmark for offshore wind financing in the region, with similar refinancing structures expected to gain traction across other Asian markets as the sector scales.

For SMBC, the transaction demonstrates the bank's ability to structure complex, multi-stakeholder financing solutions and support the refinancing of large-scale renewable assets following commercial operations.

Through Formosa 2, the successful refinancing of an operational offshore wind project provides a strong reference point for how renewable assets can be refinanced once they reach operational maturity. With the right structuring, such transactions can optimize capital structures while maintaining lender confidence, delivering both sustainable impact and compelling financial outcomes.