China’s rapid economic growth has relied heavily on coal, which accounted for around 73% of electricity generation in 2015. In response to the need to reduce reliance on carbon-intensive energy sources and to ensure a stable power supply for sustained growth, the government has prioritised scaling up renewable energy. Coastal provinces such as Fujian faced challenges, including limited scope for further thermal and hydropower expansion, alongside rising demand from industrialisation and urbanisation. By 2018, Fujian was already anticipating a power shortfall, underscoring the urgency of developing alternative energy solutions.

The Putian Pinghai Bay Offshore Wind Power Project, approved by NDB in 2016, was designed to harness offshore wind resources to generate clean electricity and support China’s energy transition. The project has delivered significant environmental benefits, producing over 1,043 GWh of clean electricity in 2022 and avoiding approximately 1.02 million tonnes of CO₂ emissions annually. The project reinforced China’s commitments to the Paris Agreement and its “dual carbon” pledge. Further, the project has supported regional development by creating jobs, enhancing technical capacity, and facilitating the establishment of a new industrial base for offshore wind manufacturing.

Experiences from the project’s design and construction provided valuable lessons for future offshore wind development. A larger project was commissioned in the third phase of the Putian Pinghai Bay wind farm, highlighting the project’s key role in demonstrating technology and helping increase offshore wind’s share in China’s energy mix. This project’s demonstration effect and scalability provided a blueprint for future offshore wind developments globally.
 

The People’s Republic of China’s rapid economic growth has historically been fuelled by coal, with 73% of electricity generated from coal-based thermal sources in 2015. To prevent long-term dependence on carbon-intensive energy and ensure a stable energy supply for sustained economic growth, the Government of China has prioritised broader adoption of renewable energy technologies to both reduce emissions and meet rising electricity demand. Coastal provinces such as Fujian faced constraints of limited potential for further thermal and hydro development, alongside rising electricity demand driven by industrialisation and urbanisation. As early as 2018, Fujian was anticipating a power deficit, highlighting the need for alternative energy sources.

At the national level, China’s policy framework emphasised transitioning toward renewable energy under the 13th Five-Year Plan, targeting large-scale deployment of offshore wind power. Fujian province has excellent wind resources, with an estimated 27 GW potential in nearshore areas, benefiting from the “narrow tube effect” in the Taiwan Strait.¹ Despite this potential, development of offshore wind faced several challenges including limited experience with large-scale offshore projects, technological uncertainties, and insufficient local supply chains. Offshore wind accounted for only 0.7% of total installed wind capacity in China in 2015, indicating a nascent sector. Addressing these gaps required demonstration projects, international financing, and technical expertise to unlock scalable and sustainable clean energy solutions.

[1] Mountains on both sides of Taiwan Straight act like a funnel that increases the wind speed.

In November 2016, NDB approved a sovereign loan for financing the Putian Pinghai Bay Offshore Wind Power Project. The project was designed to help Fujian province cope with the power challenges and to support the development of wind power energy in China. 

Located in Pinghai bay in Fujian province, the project developed a utility-scale offshore wind farm with an installed capacity of 246 MW. The project output comprised (1) an offshore wind turbine generator system with 41 turbines of 6 MW capacity each and foundation structures consisting of 28 high-rise pile caps and 13 monopiles; (2) submarine cables; (3) construction of a 220kV electrical substation on Cormorant Island and upgrading of a 110 kV onshore electrical substation to 220 kV; and (4) construction of a 1,000-ton wharf on Cormorant Island.

The project was financed through a combination of a RMB 1.97 billion sovereign loan from the New Development Bank (NDB), debt funding from domestic banks and other borrowings of RMB 0.98 billion, and equity contributions of RMB 1.68 billion, with total project cost amounting to RMB 4.63 billion.

Implementation was led by Fujian Investment and Development Group (FIDG), a wholly-owned-subsidiary of the Fujian State-owned Assets Supervision and Administration Commission (FSASAC), through a dedicated project company. Construction faced delays due to complex seabed conditions, adverse weather, supply chain pressures, and COVID-19 disruptions, with completion achieved in December 2021.

The project generated substantial development impacts across environmental, economic, and technological dimensions. Environmentally, it contributed significantly to climate change mitigation by producing over 1,043 GWh of clean electricity in 2022 and avoiding approximately 1.02 million tonnes of CO₂ emissions each year.²  This reinforced China’s commitments to the Paris Agreement and its “dual carbon” pledge of carbon peaking and carbon neutrality.

Economically, the project supported regional development by creating jobs, enhancing technical capacity, and facilitating the development of a new industrial base for offshore wind manufacturing. The establishment of a turbine manufacturing hub by Shanghai Electric in Putian catalysed the development of a local supply chain, strengthening industrial competitiveness and reducing reliance on imports.

Technologically, the project played a pioneering role by deploying large 6 MW turbines resulting in efficiency gains and introducing innovative engineering solutions tailored to complex seabed conditions. The project resulted in 11 patented engineering innovations, covering a hybrid large diameter monopile-suction bucket foundation to improve performance in rocky seabed, a life-cycle monitoring and early warning system to inform future foundation designs, a large-diameter rock-socketed monopile structure, and an integral cap plate prefabrication technique to enhance construction efficiency.

At the national level, the project contributed to increasing offshore wind capacity in China, supporting the country’s emergence as the world’s largest offshore wind market by 2021. Furthermore, its demonstration effect has facilitated replication in other regions, accelerating the adoption of offshore wind technology in China and other developing economies. 

[2] The emission factor employed at appraisal, i.e., 0.9964 kgCO2/kWh, was used to calculate CO2 avoidance.

Several factors contributed to the successful implementation and operationalisation of the project:

Strong Policy and Institutional Support: The project benefited from strong alignment with national and provincial renewable energy strategies, including China’s 13^th Five-Year Plan and Fujian’s energy development policies. Government incentives such as feed-in tariff (a fixed and subsidised tariff), guaranteed power purchase, and tax benefits played a crucial role in ensuring financial viability and attracting investment. 

Technological Innovation and Adaptation: The project’s success was underpinned by adoption of cutting-edge turbine technology and innovative engineering solutions tailored to challenging offshore conditions. The deployment of 6 MW turbines enhanced efficiency, reducing the number of turbines needed while increasing power output. Innovations such as hybrid monopile-suction bucket foundations, life-cycle monitoring systems, and advanced construction techniques addressed geological challenges and improved structural stability. These innovations not only ensured project success but also set benchmarks for future offshore wind developments. Several of the technologies have been replicated in other offshore wind power projects in China.

Effective Project Management and Implementation Capacity: Fujian Zhongmin Offshore Wind Power Co., Ltd, the project implementation unit (PIU), demonstrated strong technical capability and commitment, effectively managing complex procurement, construction, and operational processes. Despite challenges such as difficult seabed conditions, extreme weather, logistical constraints, and COVID-19 disruptions, the project team adapted by revising designs, optimising construction schedules, and deploying additional resources. NDB maintained close engagement with FIDG and PIU, providing guidance on loan procedures, reporting, and procurement. It supported capacity building, helped address project challenges, adjusted financing arrangements, and continued supervision through virtual meetings during the COVID-19 pandemic.

Local Currency Financing: The project was a local currency loan, which aligned closely with Bank’s General Strategy that sought to actively explore opportunities to offer local currency loans, both to reduce risks to borrowers as well as to promote local capital markets. The use of a local currency (RMB) loan improved the project efficiency and reduced costs by mitigating foreign exchange risks. NDB loan in local currency was highly appreciated by the borrower and FIDG, the implementing agency. Furthermore, the timely issuance of the green bond guaranteed sufficient funds for the client. In 2016, NDB issued its first green bond, which is also the first green bond by an MDB in China. The green bond was valued at RMB 3 billion with a 5-year tenor. RMB 350 million of the project is funded by a green bond issued by NDB.

Knowledge Sharing and Capacity Building: Capacity building and knowledge dissemination were central to the project’s success. Training programs and practical experience enhanced the skills of personnel involved in operation and maintenance. Moreover, the project served as a platform for sharing best practices through workshops, publications, and international forums. The documentation of lessons learned, and technical innovations has facilitated replication and scaling up of offshore wind projects in China and beyond.

Robust Environmental and Financial Sustainability: The project demonstrated strong environmental compliance, with no major environmental or social issues affecting implementation. It achieved significant emission reductions and contributed to cleaner energy production. Financially, the project proved viable with a higher-than-expected financial internal rate of return (9.10%) and strong debt service capacity. Cost optimisation, efficient operations, and higher electricity generation contributed to improved financial performance. These factors ensured long-term sustainability and bankability.
 

The Putian Pinghai Bay Offshore Wind Power Project represents a landmark achievement in China’s transition toward clean energy. Being the first commercial-scale offshore wind farm project in Fujian, it successfully demonstrated the technical, financial, and environmental viability of large-scale offshore wind power under complex conditions. By delivering higher-than-expected electricity generation (4,238 effective generation hours in 2022 compared with 3,490 hours assumed at appraisal) and emission avoidance (an annual emission avoidance of 1,020,380 tonnes, 17.2% higher than appraisal estimates), the project significantly contributed to climate mitigation and sustainable development goals. 

A key takeaway is the importance of integrating policy support, financing mechanisms, and technological innovation to enable successful renewable energy projects. The project highlights how multilateral development banks can play a catalytic role in bridging financing gaps while facilitating knowledge transfer and innovation.

Another important lesson is the need for robust risk management and adaptive implementation strategies in infrastructure projects, particularly those involving new technologies and challenging environments. The project’s ability to overcome delays and operational challenges underscores the importance of strong project management and stakeholder commitment.

Experiences from the project’s design and construction provided valuable lessons for future offshore wind development. In 2022, the PIU commissioned 302 MW in the third phase of the Putian Pinghai Bay wind farm, highlighting the project’s key role in demonstrating technology and helping increase offshore wind’s share in China’s energy mix. The project’s demonstration effect and scalability provided a blueprint for future offshore wind developments globally. Its success not only strengthened China’s leadership in offshore wind but also offers valuable insights for other countries seeking to expand renewable energy capacity and achieve low-carbon growth.