Taipei, Taiwan Power Co. (Taipower), the sole state-owned electricity supplier in the country, is planning to issue additional "green bonds" on the local over-the-counter market (OTC) next month.
According to the bond sale plan, Taipower aims to sell NT$2.4 billion (US$82.47 million) worth of green bonds in mid-May and will use the proceeds to develop renewable energy, including an offshore wind power program, a solar power project and hydroelectric power.
The green bond sale has secured approval from the Taipei Exchange, which operates the local OTC market, Taipower said.
It will be the second time Taipower has issued green bonds after the state-run company listed NT$8.3 billion in such financial instruments on the OTC market at the end of 2017.
On Dec. 15, Taipower sold two tranches of green bonds: one was NT$5.6 billion with a maturity of 7 years and a 1.04 percent coupon rate, and the other was NT$2.7 billion with a maturity of 10 years and a 1.15 percent coupon rate.
The funds raised from the two tranches have been used in a wide range of projects such as the upgrading of a natural gas-powered electricity plant in Yunlin County's Mailiao Township, and a coal-fired power plant in Taoyuan; and emission reductions at a coal-fired power plant in Taichung.
The upcoming NT$2.4 billion in green bonds will carry a maturity of 10 years and a coupon rate of 1.10 percent, Taipower said.
The government has encouraged manufacturers and financial institutions to sell green bonds, the proceeds of which are used to fund environmentally friendly projects to cut carbon emissions under the green bond issuance initiative.
Since the Financial Supervisory Commission gave the green light for the first sale of green bonds on the OTC market in mid-May 2017, 13 tranches have been issued by 11 local and foreign institutions listed on the local market.
Taipower said it could issue more green bonds by the end of 2018 after the sale of the NT$2.4 billion, potentially boosting the total issuance amount to NT$10 billion for the year.
The NT$2.4 billion green bond sale is part of Taipower's NT$18 billion bond plan, approved by a board meeting on April 3, the company said, adding that the remaining bonds will be issued in the form of three tranches of unsecured bonds.
In the first two months of this year, Taipower incurred NT$81.6 billion in losses and the outstanding bonds issued by the company totaled almost NT$400 billion as of the end of February.
Taipower was the second state-owned enterprise to issue green bonds in Taiwan, after oil refiner CPC Corp. Taiwan listed NT$3 billion worth on the OTC market on Sept. 20. 2017.
Source: Focus Taiwan News Channel