Original Korean article: DealSite
Financial circles are focusing on the offshore wind power project at Geumo-do in Yeosu, Jeolla Province. The bidding competition for financial arrangers on this project, which is estimated to cost over 1 trillion won, is entering its final stages. Among commercial banks, KB Kookmin Bank and Hana Bank are emerging as leading candidates, having repeatedly designed large-scale offshore wind project financing (PF) structures.
According to investment banking sources, the Geumo-do offshore wind power project is preparing bidding announcements including the dispatch of requests for proposals (RFP) for the selection of financial arrangers ahead of full-scale fundraising. A specific timeline has not yet been set. However, market observers expect that since the Geumo-do offshore wind power project was selected in the public-led category of the Korea Energy Agency's fixed-price contract competitive auction for wind power in the first half of 2026 last month, the project will complete financial advisory and arranger selection within this year and finish PF fundraising in the first half of next year.
Leading candidates and bidding structure
The selection process for financial arrangers is expected to follow a restricted competitive bidding format. Since DL Energy, a power and district energy subsidiary of DL Group, and Korea Midland Power are both participating as project sponsors, the process is expected to take a competitive auction form. Moreover, because offshore wind power projects have larger budgets and more complex engineering, procurement and construction (EPC) structures compared to onshore wind, industry estimates suggest that the bidding competition will be limited to financial institutions with offshore wind financing experience. This is why KB Kookmin Bank and Hana Bank are cited as leading candidates among commercial banks.
KB Kookmin Bank is regarded as a leader in South Korea's offshore wind PF market. In March 2022, it completed financial arrangement for the Jeju Hallim offshore wind power project (100MW), giving it expertise in designing PF lending structures for the first time in the offshore wind market. In April this year, it completed PF fundraising for the Sinan Ui offshore wind power project (390MW), which was selected as the first mega-project of the National Pension Fund in partnership with the Industrial Bank of Korea. Additionally, it is currently serving as a financial advisor for the first expansion complex (800MW) of an offshore wind power project being pursued in waters near Buan, Jeollabuk-do.
Hana Bank is also strengthening its position as a key financial partner for offshore wind projects. Hana Bank made equity investments in the Yeonggwang Yawol offshore wind power project (104MW) in Jeolla Province this year using an infrastructure fund in partnership with IBK Industrial Bank of Korea, and arranged fundraising through this investment, entering the offshore wind PF market. It is subsequently co-arranging financing for the Busan Dadaepo offshore wind project (99MW) with Shinhan Bank. Particularly from the second half of this year, it has taken on financial arrangement for the Wando Geumil offshore wind power project (600MW), solidifying its market position.
Consortium possibilities
Financial circles also anticipate that Shinhan Bank, which participated as a co-financial arranger for the Busan Dadaepo offshore wind power project, and Woori Bank, which participated in western region projects including the Gochang offshore wind power project in Jeollabuk-do, may support the project alongside KB Kookmin Bank and Hana Bank in consortium form. Similar to how KB Kookmin Bank and the Industrial Bank of Korea competed against a Hana Bank and Woori Bank consortium in the bidding process for the Sinan Ui offshore wind project financial arranger, the analysis suggests that banks may participate in alliance form to reduce exposure burden from sole financial arrangement.
Regarding this matter, officials from DL Energy and Korea Midland Power stated, "We are currently in the preparation stage for selecting financial arrangers," and "Details related to bidding conditions have not yet been finalized."
The Geumo-do offshore wind power project is a project that will provide 160MW of generation capacity in waters near Geumo-do, Nammyeon, Yeosu, Jeolla Province. Investment banking sources estimate the total project cost for the Geumo-do offshore wind power project at 1.2 trillion won.
