New innovations in finance can half the cost of capital for offshore wind

New GWEC report launched at COP30 outlines how blended finance and innovative instruments can unlock offshore wind investment in emerging Asia-Pacific markets, reducing costs and accelerating deployment. 

 

Download The Report

 

14 November 2025, Belém, Brazil | Unlocking innovative finance tools is crucial to realizing offshore wind’s potential in Asia-Pacific markets, with blended finance potentially halving the cost of capital for offshore wind projects, according to a new report from the Global Wind Energy Council. The report details how concessional finance, guarantees, and other mechanisms available to be used by development institutions. Multilateral Development Banks and export credit agencies can play a pivotal role in unlocking local and international capital.  

 

‘Innovative Finance Mechanisms for Southeast Asia’s Offshore Wind Take-off: A Study on Unlocking Blended Finance’ looks at the particularly critical role blended finance plays for first-wave offshore wind projects in EMDEs, where investment in both generation and supporting infrastructure is needed. The report identifies key challenges and opportunities to unlock blended finance for offshore wind (OFW) in the Asia-Pacific (APAC) region, with a particular focus on the Philippines and Vietnam. While the findings are regionally focused, they provide a globally applicable framework for financing large-scale offshore wind projects in emerging economies. 

 

Rebecca Williams, Deputy CEO of the Global Wind Energy Council, said: 
“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.  

 

“Our analysis shows that when projects are commercially viable and risks are effectively managed, both domestic and international capital are ready to flow But central to this effort will be reducing the cost of capital By combining strong policy frameworks with credible developers and robust financial structures, offshore wind is a highly attractive and scalable investment in emerging markets. That means project pipelines and turbines in the water, which in turn realizes the benefits of clean, affordable and secure renewable energy for homes, businesses and industries in these markets.  

 

“Offshore wind already delivers 83 GW of clean and secure renewable energy, equivalent to powering 73 million homes. As we enter the ‘Age of Electricity’, this next wave of offshore wind markets must be supported as they drive their continued economic growth with their own energy resources. The shared benefits of electrification built on local supply and energy security will be wide-ranging and have deep benefits across the APAC region.” 

 

The Report 

GWEC’s analysis demonstrates that when offshore wind projects are bankable and risks are effectively mitigated and shared, both domestic and international capital can be mobilised. Where market or deal-level gaps exist, innovative instruments such as blended finance, guarantees, concessional loans, and mechanisms from DFIs, MDBs, and ECAs can play a pivotal role in bridging gaps and unlocking capital. wind deployment across the APAC region.  

 

The report models a 500 MW offshore wind project and quantifies the impact of different financing structures in the Philippines and Vietnam. The results show that a fully blended capital stack — combining commercial debt, concessional loans, export credit guarantees, and grants — can deliver the most competitive outcomes. 

 

By optimising the financing mix, the weighted average cost of capital (WACC) can almost halve in both countries - falling from 11.72% to 6.54% in the Philippines, and from 12.23% to 6.82% in Vietnam. This reduction enables tariffs to decrease by more than one-third, from 16.20 PHP/kWh (0.28 USD/kWh) to 10.50 PHP/kWh (0.18 USD/kWh) in the Philippines, and from 4,579.60 VND/kWh (0.17 USD/kWh) to 2,931.45 VND/kWh (0.11 USD/kWh) in Vietnam. At the same time, the Debt-Service Coverage Ratio (DSCR) improves, enhancing lender confidence and creating a model for affordable, investable, and scalable offshore wind in emerging markets. 

 

The report makes a series of recommendations for key energy transition stakeholders:  

 

Governments:   

• Create bankable offtake and pricing frameworks  

• Establish a Clear Offtake Framework: Define a transparent and bankable offtake mechanism that ensures revenue predictability for developers and financiers.  

• Formalize Revenue Frameworks through Viable PPAs :  Explore viable PPA mechanisms  to  help  provide revenue certainty.  This approach can help de-risk early-stage projects and crowd in private investment, particularly where market maturity or offtaker   creditworthiness is still evolving.  

• Consider Adopting Contracts for Difference (CfD): Consider implementing CfD models, as used in the UK and Poland, to stabilize electricity prices for off-takers and reduce revenue risk for developers and financiers, improving project bankability.  

• Update Frameworks as the Market Evolves: Regularly assess and update frameworks to adapt to external market conditions and technology changes.  

 

 

Developers:   

• Collaborate to shape policy   

• Collaborate with policymakers to shape policies that realistically balances cost, risk and market needs.   

• Share project experience and appropriate data to inform tariff benchmarking and design of next-generation auction packages.  

• Innovate project structuring and partnerships  

• Develop consortium structures to pool expertise and diversify project risks among commercial and development partners.  

 

 

DFIs/MDBs:  

• Provide concessional debt for first mover OFW projects  

• Analysis from research and the report’s capital stack modelling demonstrated that an essential form of support from DFIs/MDBs to unlock financing for OFW in the Philippines and Vietnam is the provision of concessional (below market) debt to enhance a project’s financial viability. 

• Even when DFIs/MDBs provide loans at market terms, their involvement remains highly valuable due to the “halo effect,” or other financial institutions interested in participating because of the due diligence and credibility provided by DFIs/MDBs.   

• Provide concessional funding for infrastructure   

• DFIs/MDBs should extend concessional funding to support essential OFW infrastructure, namely port and grid upgrades and development. This provides catalytic value, contributing to industry-wide impact beyond just one OFW project.  

• Expand technical assistance and capacity-building  

• DFIs/MDBs also have an opportunity to double down on the technical assistance they provide for macro-level gaps. This would further help governments utilize MDBs' technical assistance programs to guide policy development, PPA design, and analytical work. Conducting technical studies to help governments plan for new or upgraded infrastructure, such as ports and grids, is also valuable.  

 

Multilateral Climate Funds:  

• Provide first loss capital and other concessional funding  

• Multilateral climate funds such as the Green Climate Fund, Global Environment Facility, and Climate Investment Funds should expand the use of blended finance instruments, such as grants, concessional funding, and first-loss capital, to catalyse investment in OFW as an important contributor to the growth of renewable energy. This can contribute to the availability of concessional capital deployed through DFIs/MDBs and other investment vehicles.  
  

 

 

ECAs:  

• Provide credit guarantees as part of a consortium  

• ECAs should provide credit guarantees as part of a consortium to de-risk OFW projects and crowd in private capital at scale. Case studies from Taiwan’s Hai Long and Poland’s Baltic Power projects show that ECA-backed guarantees improve debt affordability and help maintain high debt service coverage ratios. By covering up to 90–95% of project risks, ECA consortia can enable longer loan tenors, reduce perceived country and commercial risks, and attract risk-averse lenders.  

• Facilitate cross-border partnerships  

• Support parent country exports of turbines, cables, and other supply chain components through ECA-backed loans and insurance, strengthening bilateral ties and technology transfer.