By Adrijana Buljan
First steps have been made towards building the first subsea power cable factory in Taiwan to support its growing offshore wind sector as the cable manufacturer NKT and Taiwan’s conglomerate Walsin Lihwa announced they were establishing a joint venture.
The factory, which will specialise in the production of high- and medium-voltage AC subsea power cables, is expected to be built and put into operation in 2027.
Under a joint venture agreement the two companies will soon sign, NKT will provide technical support for the construction of the factory. The deal also includes a Service Agreement for the construction of the factory and a Technology License Agreement licensing NKT technology to the joint venture.
While NKT will own a share of the joint venture and act as the technical partner, the construction of the factory itself will not include investments from the cable manufacturer. Once the factory is in operation, NKT will generate revenue based on a royalty scheme and dividend from the joint venture.
“We expect high growth in the Asian market in the coming decades. Taiwan is targeting to install additional 15GW of offshore wind by 2035. The joint venture is an attractive opportunity for NKT from a financial perspective and an opportunity for us to participate in a new, growing market, which is otherwise challenging to serve”, said NKT President and CEO, Alexander Kara.
NKT’s CEO further added that this joint venture was an important first step for the company to establish a presence in the Asian high- and medium-voltage market, and also a platform for future growth in the region.
The company’s partner, Walsin Lihwa, is a leading industrial conglomerate publicly listed in Taiwan, with wire and cable being one of its core business segments.
“Taiwan is blessed with an abundance of wind resources, presenting vast commercial opportunities in offshore wind power and submarine cable”, said Chairman of Walsin Lihwa, Yu-Lon Chiao.
The Taiwanese government recently closed the first offshore wind auction under its Round 3 Zonal Development Plan, selecting seven new offshore wind projects that will move forward to realisation.
