Cathay FHC has horizontally integrated the group's resources based on its insight into climate change risks, and is on a mission to become the number one brand in green finance. It is thus taking strides towards the goal of mutual prosperity of the environment and economy.
(Click on the picture to zoom in)
Solar Power Station Financing
CUB upholds the spirit that “Green Finance Leads to a Sustainable Future” and has been integrating resources, establishing research teams, and building a dedicated power plant evaluation model since 2011 to provide guidelines for financing assessment. Since then, CUB has grown to become the top financing provider to solar energy projects in Taiwan. In 2018, CUB was awarded the “Banking and Finance Best Practice Award – Best Green Project Financing Award” and “Top Solar System Award – Best Financier”.
As of the end of 2018, CUB has provided financing to approximately 1,900 projects with a total of 477 MW solar PV power capacity, reducing CO2 emissions by 297 thousand metric tons, which is roughly 763 times the carbon absorption of Da'an Forest Parks.
In 2016, CUB completed Taiwan’s first large-scale rooftop solar power plant utilizing project financing structure and it was also the first Equator Principle compliant project. In 2017, it went on to complete Taiwan’s first large ground-mounted solar power plant with limited recourse project financing structure and it’s also in compliance with EPs; financial close was completed in May 2018.
Note 1: According to Taipower, solar power plant in Taiwan generates around 1,123 kWh per kW of installed capacity; according to the household electricity consumption announced by Taiwan Power Company, the average monthly electricity consumption per household is 292 kWh in 2018.
Note 2: According to the 2017 power generation coefficient announced by the Bureau of Energy: approximately 0.554 kg of CO2 is emitted per kWh. Based on the conversion formula published in 2011 by Bureau of Energy, MOEA, the annual CO2 absorption of Da’an Forest Park is 389 metric tons.
Offshore Wind-Power Financing
As a socially-responsible corporate citizen, CUB strives to help protect the environment through its financial operations. CUB financed the offshore wind power plants (The Formosa I Phase I Project) in Taiwan in 2016. Formosa I Offshore Wind Phase 1 Project represents Taiwan’s first financing deal in compliance with the Equator Principles and is the first offshore wind farm in Taiwan.
The Formosa I Offshore Wind Project consists of two phases. CUB served as the Mandated Lead Arranger, Facility Agent, Account Bank, and Security Agent for the Formosa I Phase I syndicated loan. The two turbines in Phase 1 with the total capacity of 8MW were installed in 2016. Financing for the Phase II (totaling 22 turbines) was completed in 2018, in which CUB served as the Documentation Bank, Security Agent, and Guarantee Facility Agent for the syndicated loan. This offshore wind farm has a total installed capacity of 128 MW and is expected to generate 430 million kWh per year, reducing CO2 emissions by 236 thousand metric tons, which is roughly 607 times the carbon absorption of Da-an Forest Parks. The project was awarded the 2018 “Asia-Pacific Renewable Deal of the Year” by Project Finance International (PFI).
Furthermore, with its extensive project finance experience, CUB was mandated to serve as the financial advisor for the Hai Long 2 and Hai Long 3 Offshore Wind Farms in 2018, and successfully assisted Hai Long 2 in receiving a 300 MW allocation from the Bureau of Energy. Hai Long 2 and Hai Long 3 subsequently won the bidding for capacity allocation of 232 MW and 512 MW, respectively.
At the end of 2018, the world's largest offshore wind power developer Ørsted announced that it is appointing CUB to serve as one of the Mandated Lead Arranger of its syndicated loan, and would be jointly arranging a 5-year NT$25 billion Revolving Credit Facility (RCF) together with two other banks (one domestic, one foreign).
Note: According to the data from the 2 offshore wind turbines that have been in operation, the average capacity factor from May to December 2017 was 23%, 28%, 11%, 34%, 14%, 66%, 62%, and 68%, respectively. The average capacity of 38% is used for the capacity factor and power generation is calculated using the formula “actual power generation = installed capacity x capacity factor”.
CUB assisted Formosa Wind Power, a Swancor subsidiary, with the construction of two offshore wind turbines, located off the coast of Miaoli with a total installed capacity of 8MW.
Renewable Energy Contractors' & Erection All Risks Insurance
Cathay Century provides construction insurance products suitable for the green energy industry's risks, and has been undertaking construction insurance for hydroelectric power plants and solar power generation equipment since 2010. Offshore wind farms entail high construction risks due to natural disasters and technical challenges. Cathay Century became the first property insurance company in Taiwan to utilize its risk assessment and loss prevention expertise to provide offshore wind turbine insurance for the CUB offshore wind power syndicated loan in 2016. Cathay Century also provided insurance for hydroelectric power plants, solar power plants, and offshore wind farms and equipment in the amount of NT$26.58 billion in 2018.