Two major insurance companies in Taiwan are eyeing investments in the renewable energy sector.
Cathay
Cathay Financial Holding said that it would invest up to about $900m in a wind farm development project off Changhua which is located on the west coast of Taiwan. Meanwhile, Fubon Financial Holding revealed it plans to set up a subsidiary focused on renewable energy investments, reported the government-owned Central News Agency. Both financial services groups plan to execute their plans through their life insurance units.
Cathay Financial said in a statement that its wholly-owned subsidiary Cathay Life Insurance will invest up to NT$27.32bn ($909m) through Cathay Wind Power to acquire a 50% stake in Greater Changhua NW Holdings and extend 50% of shareholder loans to Greater Changhua NW Holdings and Greater Changhua Offshore Wind Farm NW from Orsted Wind Power TW Holdings.
The investment, which the company said has already secured approval from the Financial Supervisory Commission (FSC), is the largest ever in the local insurance sector in terms of offshore wind development. Cathay Life will take a 99% stake in Cathay Wind Power, currently a wholly-owned subsidiary of Cathay Power, to lower the stake owned by the latter to 1%.
Cathay Wind Power, Denmark-based Orsted, and lending banks will sign a purchasing agreement to fulfill the financial requirements of the transaction before closing the deal.
In addition, Cathay Life Insurance and Cathay Power Co will continue to invest in offshore wind power development in Changhua, the holding company said.
Fubon
Fubon Life Insurance, a wholly-owned subsidiary of Fubon Financial Holding, said in a statement that its board had approved on 22 October a plan for the life insurer to set up a new holding company, tentatively named Star Shining Holding.
Star Shining Holding will be in charge of the allocation of funds in renewable investments, the company said, adding that a stock transaction will enable Star Shining Energy—which specialises in solar energy development—to become a wholly-owned subsidiary of Star Shining Holding. Fubon Life said the transaction is expected to amount to NT$2.4bn.
The plan to set up Star Shining Holding is pending regulatory approval, the company added.
Cathay Holding and Fubon Holding are the top two financial holding firms in Taiwan.