Financial Innovation and Sustainable Products/Services
Cathay not only carries out full examinations and inventories on its internal business operation, but also upholds its sustainability vision of “being a leader in green finance, creating a sustainable future”. Cathay actively exercises its right of financial asset allocation to tangibly ameliorate the risks brought by climate change, collaborates with its customers through green cash flows, and acts as a leader in the industry to achieve the goal of net-zero emissions, so as to become a pioneer in the green energy industry in Taiwan.
Cathay Life has been jointly investing in Galaxy Energy with AU Optronics since 2014. In 2016, we initiated a model for joint ventures with solar energy service providers in the form of special projects. Under this model, we have successively formed joint investments in the following companies: Taixu Energy (with Sino-American Silicon Products); Xinritai Co., Ltd. (with Neo Solar Power); and Solar Master Energy (with Power Master Group), thus promoting solar power industrial clusters and setting an example for other companies in the insurance industry. Cathay Life and Solar Master Energy jointly developed and built Yunlin Mailiao Tienji Solar Power Plant in October 2021, creating a model example of "utilizing the funds of a life insurance company for renewable energy public constructions" and "activating national land," thereby creating a win-win situation for government, companies, and local communities. The total investment amount as of 2021 that was approved by the FSC beforehand or reported afterwards reached NT$7 billion, the installed capacity of investments in solar power exceeded 247.8 MW.
CUB began integrating resources, establishing research teams, and building a dedicated power plant evaluation model in 2011 to provide guidelines for financing assessment.CUB provided loans for the first solar power generation project, first project that complied with Equator Principles, and first syndicated loan for offshore wind power in Taiwan. The Bank also served as the arranger of the syndicated loan for the largest offshore wind farm in the Asia Pacific in 2019. Cathay United Bank has ceased new loans for coal-fired power generation projects in October 2019 and set a goal of increasing the proportion of credit business associated with loans for renewable energy in the power generation industry to 85% by 2025 in order to demonstrate its determination towards sustainable business operation.
CUB provided loans for 325 solar power stations in Taiwan in 2021 with a total installed capacity of 183.6 MW. As of the end of 2021, CUB has financed over 2500 domestic and foreign solar power plants with a total installed capacity of 758 MW, reducing CO2 emissions by nearly 393 thousand metric tons a year, which is roughly 1,023 times the carbon absorption of Da'an Forest Park. For offshore wind farms, Cathay United Bank provided the first syndicated loan for offshore wind power in Taiwan, a 128 MW offshore wind farm, and also participated in the financing projects for the 640 MW Yunlin Offshore Wind Farm and 605 MW Greater Changhua Offshore Wind Farm. This demonstrates the Bank's active investment in various renewable energy financing projects.Best Green Project Financing Award" in 2018 for its excellent project financing results, CUB once again won the Award of Excellence in 2020, and is the only winner of the Award of Excellence since the awards were first established.
Cathay Century has been providing appropriate insurance for the green industry sector since its construction and operation phases in 2010. It became the first leader insurance company to offer insurance protection for offshore wind farms in Taiwan in 2016. Cathay Century has been dedicated to improving its competitiveness and professional expertise in the renewable energy industry. It established an Energy Infrastructure Team in 2020 with a hope to develop its renewable energy business via risk identification. Cathay Century also provides insurance for hydroelectric power plants, solar power plants, and wind farms and equipment, with additional underwritten amount of NT$31.61billion in 2021.
Following the rise of environmental awareness, increasing numbers of car drivers and scooter riders are choosing to buy eco-friendly electric vehicles. Cathay Century launched the first green vehicle insurance in Taiwan in 2013, and has insured a cumulative total of 28,122 eco-friendly vehicles as of the end of 2021. 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 eco-friendly vehicles.
Cathay Century offered bicycle insurance in 2016, and the number of underwritten cases reached 8,261 as of the end of 2021. 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 2021, Kaohsiung City, Tainan City, Taipei City, New Taipei City, Taoyuan City, Miaoli County, Pingtung County, Hsinchu County, Kinmen County, and Chiayi County were covered by Public Bicycle Accident Insurance, protecting over 77.57 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.
Environmentally Friendly and Green Energy-saving Enterprise IPO Guidance
Cathay Securities actively assists environmentally friendly and green energy-saving enterprise with raising capital. In 2020, Cathay Securities served as the underwriter for convertible corporate bonds issued by Anji Technology Co., Ltd./SPO-CB Anji 2 (64772), and helped the company raise NT$335 million in capital. Furthermore, Cathay Securities continues to assist the PM Group with its IPO. The PM Group is an iconic solar power company in Taiwan with a total installed capacity of approximately 450 MW in all of its domestic solar power plants, holding 10% market share. It is the leading solar power engineering, procurement, and construction (EPC) company in Taiwan, controls key components, has a wealth of experience with grid connection through feeders, and has immense future potential.In addition, Cathay Securities is also actively involved in fundraising for environmental protection and green enterprises, and helped the initial public offering (IPO) of Power Master (6839), a leading solar photovoltaic company, in 2021, raising NT$288 million for the convertible corporate bonds of Anji Technology, Co., Ltd. (core business: high-efficiency solar modules, etc.), and participated in the underwriting of green bonds issued by Chailease Holding Company Limited, Taipower, and TSMC.
In response to the first round of issuance of green bonds in Taiwan, Cathay Life purchased US$30 million in green bonds, accounting for 17% of the total amount issued in the first round, and the cumulative investment amount in green bonds, including foreign green bonds, reached NT$19.5 billion as of the end of 2021.
CUB also participated in the underwriting of the international green bonds listed both on the Taipei and Luxembourg exchanges in October 2021. The issuance period is 30 years with a total amount of up to US$180 million. The proceeds will be used to fund or refinance the “Sustainability Bond Project” of the French Banking Group BPCE or be used to fund the renewable energy sector in Taiwan, including the largest offshore wind farm project in Asia, Yunlin Offshore Wind Farm.
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