Taiwan Power Co. (Taipower) celebrated the listing and first issuance of its green bonds in Taipei Exchange (TPEx) with much fanfare at a ceremony in the morning of 15 December. Formerly known as Gre Tai Securities Market (GTSM), TPEx is responsible for organizing Taiwan’s local bond market and has begun trading green bonds since this May. In addition to TPEx Chairman Philip Chen and Taipower Chairman Wei-Fu Yang, the attendees of this event include Chairman Daw-Yi Hsu of KGI Securities Co. Ltd. and 50 other guests. The inaugural listing of Taipower’s green bonds marks another milestone in Taiwan’s securities market.
In his opening speech at the ceremony, Chairman Chen of TPEx said that the market has become more environmentally conscious in the recent years due to the effects of climate change and environmental degradation. Green bonds, he pointed out, have emerged as an effective tool to protect our world. The Climate Bond Initiative, an organization that certifies green bonds, has reported that the total value of green bonds issued worldwide during this year is estimated to reach US$130 billion.
Chen said that he is very proud that TPEx initiated green bond trading in Taiwan with the help of governmental and financial institutions. He also thanked Taipower for its enormous contribution to this market. Taipower's first issuance totals around NT$8.3 billion, which in turn pushes this year’s local green bond listing to more than NT$20 billion. Chen believes that Taiwan is in the midst of a shift to a new growth model, and Taipower can play a major role in the development of the island’s green economy.
The proceeds from the green bonds will be used to fund projects that help reduce air pollution, which has been a popular topic lately and was cited by Chen as a major challenge for Taiwan and its government-owned enterprises. At the same time, Chen expects this green economy strategy to be the engine that drives Taiwan’s economy during this low-growth period. The promotion of this strategy will be instrumental to the success of the new development model. Chen concluded his speech by again thanking Taipower for their support of the local green bond market.
KGI Securities is the lead underwriter that represents a syndicate of 16 banks and brokers that participated in the listing. At the ceremony, Chairman Hsu of KGI stated that his company is honored to be the lead underwriter. Hsu noted that this NT$8.3 billion issuance is also the largest to date in Taiwan’s green bond market. Thus, investors are bullish about Taipower, which is setting a benchmark in the securities market and spearheading the development of the green economy. Hsu believes that the leveraging of private capital in this case will produce mutual gains for the government, bond issuers, investors and financial intermediaries. Additionally, this strategy is expected to put Taiwan’s development on a more sustainable path.
Taipower Chairman Wei-Fu Yang also spoke at the event. He pointed out that the issuance of the green bonds shows that his company is committed to supporting the government’s efforts to have the island’s power supplied by renewable energies. Moreover, the amount of bonds that will be auctioned off in this listing is expected to be about three times as much compared with prior auctions.
Yang emphasized that the government-owned Taipower has a duty to support the policy goal of stabilizing the island’s power supply while protecting the environment. To that end, Taipower will be increasing investments in renewable energies such as wind, solar, and natural gas. It is expected that renewable generation will eventually replace coal-fired power plants in the domestic electricity market. Yang also mentioned that Taipower will allocate more of its capital expenditure to green investment funds in the future. Taipower’s capital expenditure averages around NT$100 billion per year and a part of this sum can be used to grow the domestic green bond market.
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