Blended finance seen to halve OSW costs

Belém, Brazil — A viable fusion of financing tools—ranging from concessional loans to hard-edged guarantees—is poised to slash capital costs by roughly half for offshore wind projects in the Asia-Pacific (APAC) region, primarily for priority pipelines in the Philippines and Vietnam, according to the Global Wind Energy Council (GWEC).

- By MYRNA M. VELASCO

A report touching on “Innovative Finance Mechanisms for Southeast Asia’s Offshore Wind Takeoff: A Study on Unlocking Blended Finance,” which was unveiled by GWEC on the sidelines of the ongoing COP30 Climate Change Summit here, specified that innovative and hybrid financing instruments can serve as a major lever to drive down capital costs for offshore wind installations in the region.

GWEC highlighted that in a mixed-capital finance strategy for offshore wind, multilateral development banks (MDBs) as well as export credit agencies (ECAs) would be key to unleashing both local and global capital that shall be funneled into targeted projects.

“Where market or deal-level gaps exist, innovative instruments such as blended finance, guarantees, concessional loans and mechanisms from DFIs [development finance institutions], MDBs, and ECAs can play a pivotal role in bridging gaps and unlocking capital for wind deployment across the APAC region,” the organization noted.

GWEC deputy chief executive Rebecca Williams underscored that based on their data, it is unmistakable that offshore wind in APAC is about to take off, and it will be a core power source for rapidly growing economies, including Southeast Asian markets.

“GWEC numbers show that offshore wind in the APAC region is on the verge of booming. Offshore wind will play a key role in powering fast growing emerging economies like the Philippines and Vietnam,” she reiterated.

Williams further qualified that, based on their analysis, “when projects are commercially viable and risks are effectively managed, both domestic and international capital are ready to flow.”