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”.

(https://www.moeaboe.gov.tw/ECW/populace/news/News.aspx?kind=1&menu_id=41&news_id=14943)

 

 

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.



Preferential Loans for Green Buildings

CUB had approved 6 green building loans as of the end of 2018 to encourage applications for the green building label for buildings involved in urban renewal, or for the construction of green buildings. By providing cash flow support, CUB encourages developers to prioritize the planning of green buildings, and thus contributes to the green environment.

 

Supporting Development of the Electric Vehicle and Scooter Industries

Following the rise of environmental awareness, increasing numbers of car drivers and scooter riders are choosing to buy environmentally friendly electric vehicles. Cathay Century launched the first green vehicle insurance in Taiwan in 2013, and has insured a total of 19,863 green vehicles as of the end of 2018. The insurance was offered in coordination with government initiatives to support the green energy industry, and also aids Taiwan's transportation tool transition by encouraging drivers to support environmentally-friendly vehicles.

Furthermore, CUB continued collaborating with Gogoro, the highest market share owner of domestic electric scooter and Amulaire Thermal Technology Inc., a worldly-known manufacturer of electric vehicle components in 2018, and will consider providing electric motor vehicle loans in the future to support Taiwan green energy development.

Bicycle Insurance

Cathay Century started to offer bicycle insurance in 2016, and the total number of underwritten cases reached 1,166 as of the end of 2018. Furthermore, Cathay Century offered the first Public Bicycle Accident Insurance and Public Bicycle Third-party Liability Insurance in Taiwan in June 2018, and insurance that encourages more people to join the ranks of bicycle riders. As of the end of 2018, Kaohsiung City, Tainan City, Taipei City, New Taipei City, and Taoyuan City were covered by Public Bicycle Accident Insurance, protecting 3.4 million people. The insurance eliminates the risk of bicycle riders not having any insurance coverage, and satisfies the wide range of needs of green consumers.


Green Bonds Underwriting

The rising awareness of green finance has driven the development of new economic patterns. Taiwan Power Company issued green bonds for the first time in 2017; at NT$8.3 billion, it was the largest amount of green bonds to have ever been offered by Taipei Exchange. The funds raised by the green bonds will be directed toward three types of green investment projects, specifically greenhouse gas reduction, pollution prevention and control, and renewable energy and energy technology development. Taiwan Power Company issued a total of NT$8.3 billion in green bonds, and Cathay Securities served as the underwriter for NT$500 million in bonds with a maturity of 10 years. Taiwan Power Company issued two tranches of green bonds that totaled NT$5.3 billion in 2018, and Cathay Securities continued to serve as the underwriter for NT$400 million in bonds.


Assisted Environmentally Friendly and Green Energy-saving Enterprises with Raising Capital

Cathay Securities actively assists environmentally friendly and green energy-saving enterprises with raising capital. Besides assisting the solar power company Anji Technology Co., Ltd. Raise NT$24 million in capital in 2018, Cathay Securities formally signed an agreement with the PM Group to assist with its IPO. The PM Group is an iconic solar power company in Taiwan with a total installed capacity of approximately 271 MW in all of its domestic solar power plants, holding 13% market share. It is the leading solar power EPC (Engineering, Procurement, Construction) company in Taiwan, controls key components, has a wealth of experience with grid connection through feeders, and has immense future potential. Cathay Securities will assist Solar Master Energy Co., Ltd. and Ciao Sole Corporation Technology Ltd., which are both members of the PM Group, with EPC business planning for public listing. The PM Group plans to become an emerging stock in 2019 and formally enter the capital market.

Cathay Securities completes the contract signing ceremony with the PM Group. Chairperson Shun-Yu Chuang of Cathay Securities is on the left and Chairperson Tsung-Jung Tsai of the PM Group is on the right.

 

Investing in Promising Environmentally Friendly Startups

Cathay Venture continues to invest in green environmentally-friendly enterprises that are not yet publicly traded. As of the end of 2018, Cathay Venture's investment position in environmentally friendly businesses is nearly NT$400 million; the amount of Cathay Venture's investments in environmentally friendly businesses out of total investments in 2018 is listed as below.


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