Taipei: Taiwan is expected to begin accepting applications as early as July for a government-backed credit guarantee program designed to support Taiwanese companies investing in the United States, Vice Premier Cheng Li-chiun said Friday. Speaking at a ceremony marking the signing of a letter of intent for the "Financing Guarantee Mechanism for Enterprise Investment in the United States," Cheng said the program will help Taiwanese businesses expand their overseas presence.

According to Focus Taiwan, the initiative was launched by the National Development Council (NDC) following the signing of a Taiwan-U.S. memorandum of understanding (MOU) on investment cooperation in January. Under the mechanism, the government will provide credit guarantees to support financial institutions in extending corporate credit lines to Taiwanese firms investing in the U.S. The program is expected to provide financing support of up to US$250 billion to assist companies seeking capital for their U.S. investment plans, according to the NDC.

Friday's signing ceremony was attended by representatives from 15 state-run and private banks, as well as Cheng and American Institute in Taiwan (AIT) Director Raymond Greene. NDC Minister Yeh Chun-hsien said 15 domestic banks have committed to participate in the first phase of the program, raising US$575 million. Together with a US$800 million contribution from the NDC, the initial financing pool will total US$1.375 billion.

The Executive Yuan approved the financing guarantee mechanism in late May. The first-phase fundraising target was originally set at US$1.2 billion, but eventually exceeded expectations, Cheng said. Applications for the credit guarantees are expected to open next month once the necessary procedures are completed, she added.

"Once the relevant contracts among the government, industry associations and banks are completed, applications should be accepted as early as the beginning of July," Cheng added. Amid the restructuring of global supply chains and the rapid development of artificial intelligence, Cheng said Taiwanese companies have continued investing at home while maintaining their lead in key technologies, even as they expand into markets such as the U.S., Europe, and Japan.

By combining the strengths of the financial and industrial sectors, Taiwan can extend its supply chains globally while helping its financial institutions broaden their international service networks, she added.