Green bonds are starting to gather pace since rules unveiled
New energy, meet new finance. That’s the thinking of Taiwan’s government, which is starting to map out funding plans for a power system that can no longer rely on nuclear reactors.
Prime Minister Lin Chuan’s administration aims to increase the share of renewable energy such as water, wind and solar to 20 percent of total power output on the island by 2025, up from 5 percent currently. The Taiwan government hopes to attract NT$1.8 trillion ($59 billion) of private capital.
Developing funding channels will be critical, given the ambitious target. Bloomberg New Energy Finance, in a September assessment, said that Taiwan might only raise the share of renewable energy in electricity generation to 9.5 percent by 2025, in part because of the lack of a developed supply chain for the new sources of power.
Among the challenging targets for 2025 set by the island’s government:
To try and lure investment, authorities will guarantee purchases of the resulting electricity. Taiwan’s green finance is still at an early stage and there will be a lot of business opportunities, said Lin Chih-chi, director general of the department of planning at Financial Supervisory Commission.
Taiwan is making some headway in the area of green bonds — a type of security also being endorsed by Apple Inc. — after rolling out rules for them in April. Four banks including E. Sun Commercial Bank, Chinatrust Commercial Bank, Bank SinoPac and KGI Bank have sold the first batch of green bonds. CPC Corporation, a petroleum and natural-gas refiner, is planning to issue green bonds by the end of this year. Credit Agricole CA also intends to sell green bonds in Taiwan, people familiar with the matter said in May.Discover More