Cathay FHC's Three Arrows for Energy Transition: Renewable
Energy Investment and Financing, Innovative Collaboration in
Renewable Energy, and Leveraging Core Competencies to Innovate
Services.
TAIPEI, June 28,
2024 /CNW/ -- Sustainable finance boosts the
competitiveness of achieving net-zero transformation. Yesterday
(26th), Lee Chang-Ken, President of
Cathay Financial Holdings (Cathay FHC), personally attended the
"Climate Investment Summit" at the London Stock Exchange (LSEG),
marking the second consecutive year he has been the only speaker
from Taiwan. Building on the
consensus of "Energy System Transformation and Moving Away from
Fossil Fuels" reached at the 28th UN Climate Change Conference
(COP28) in 2023, Lee used
Asia as an example to discuss the
challenges and solutions in promoting renewable energy, sharing
Cathay FHC's cross-industry efforts and tangible results in driving
renewable energy initiatives. This demonstrated Taiwan's financial sector's success in
achieving net-zero transformation on a global scale.
The "Climate Investment Summit" has been an iconic platform of
global climate solutions, held at the historical financial hub of
LSEG. Cathay FHC not only became the only Taiwanese financial
institution invited to the summit again but also acted as a bridge
for energy transition dialogue between Europe, America, and Asia. This signifies the international
recognition of Taiwan's financial
industry's commitment and achievements in energy transition. Lee
participated in the summit's discussion on "Renewable Returns: The
Business Case for Mature Energy Technologies," sharing how Cathay
FHC supports the development of low-carbon industries through
capital and innovative financial services. Cathay FHC has been
recognized for two consecutive years as a global best practice case
by the "Investor Agenda" for its "Investor Climate Action Plans"
(ICAPs), making it the only selected asset owner in Asia.
During the panel, Lee pointed out the pain points and solutions
for promoting renewable energy in Southeast Asia, shared the history of the
Taiwanese government's efforts in promoting renewable energy, and
discussed Cathay FHC's role as a pioneer in the field. Cathay FHC
continues to lead intrial implementation, guiding the market to
understand the feasibility. 'We are also pleased to support various
innovative models that will benefit the future,' emphasizes Lee. It
is noted that Asia is the main
source of global electricity demand growth and still heavily relies
on fossil fuels. Southeast Asian governments should continue to
enhance policy stability and strengthen infrastructure, while
making good use of financial tools such as guarantees or blended
finance to improve the cost of capital and investment risks in
emerging markets. They should also address just transition issues
such as labor employment to ensure the success of the energy
transition.
Cathay FHC is the sixth financial institution in Asia to set SBT validated by the Science Based
Targets initiative (SBTi). It has pledged to achieve net-zero
carbon emissions in its financial assetsby 2050. Cathay FHC is also
the first Taiwanese financial industry member of RE100 and a
pioneer in renewable energy financing in Taiwan. In the fields of low-carbon transition
and renewable energy innovation, Cathay FHC continues to lead in
trial implementations, guiding the market to understand feasibility
and becoming a key driver of renewable energy in Taiwan. In 2023, Cathay FHC's renewable energy
usage reached 17.95 million kWh, and by the end of 2023, the total
amount of low-carbon investments and financing amounted to
NT$330.5 billion (approximately
equivalent to USD 11.7 billion).
Regarding Cathay FHC' path to promoting renewable energy
development, Lee outlined three major strategies. The first
strategy involves "Enhancing Renewable Energy Investments and
Financing." In 2023, Cathay FHC's total investments and financing
in renewable energy reached NT$63.3
billion (approximately USD 2
billion), with a solar installation capacity of 1,504 MW.
Cathay United Bank pioneered Taiwan's first solar and offshore wind power
financing; Cathay Life Insurance became Taiwan's first life insurance company to
establish the solar project investment firm "Cathay Power".
Recently, this company has been developing renewable energy on land
deemed unsuitable for agriculture by the Ministry of Agriculture,
fostering a mutually beneficial scenario for land revitalization
and renewable energy development, while increasing power generation
to meet market demand.
Secondly, Cathay FHC promotes "Innovative Collaboration in
Renewable Energy." Lee believes that Cathay FHC's emphasis on
stakeholders' success, active attempts at collaborative innovation,
and the pursuit of suitable directions to identify success stories
are the reasons why Cathay FHC can continually overcome challenges
and accelerate the development of renewable energy. For example,
Cathay Power aims to systematically think about agrivoltaics,
creating a standardized, scalable, and sustainable agrivoltaics
model. The collaboration with the government to launch the
"Agri-Light Project" agrivoltaics experiment in Dalin, Chiayi, is
an innovative plan that integrates the cultivation of forge grass
with photovoltaic technology. This initiative addresses several
issues: it is expected to reduces Taiwan's reliance on imported forage and
mitigates the risks of instability of the international supply
chain while avoiding negative impact on local agriculture.
Furthermore, livestock manure can be utilized for biogas power
generation, with the residue serving as organic fertilizer, thereby
promoting balanced and circular agriculture in Taiwan.
Thirdly, Lee emphasized the importance of "Leveraging Core
Competencies to Innovate Services." Facing the numerous challenges
climate change poses to businesses, Cathay FHC proactively seeks
solutions by leveraging its core financial competencies to offer
diverse, innovative services, turning challenges into
opportunities. For example, Cathay Securities collaborated closely
with Cathay FHC' Digital Data & Technology Center(DDT)'s
blockchain team to develop a Security Token Offering (STO) product,
Taiwan's first STO. The issuance
involves a 6-year debt-based STO offering a 3.5% annual interest
rate. Coupled with a preferential purchase mechanism for electric
machinery, the overall investment return rate increases
significantly, assisting green energy enterprises in raising funds
from professional investors and giving investors more confidence.
Small and medium-sized enterprises often struggle to independently
purchase green power. As Taiwan's
largest commercial real estate owner, Cathay Life consolidates the
purchase and distribution of green power, enabling our tenants to
obtain it more efficiently. This approach plays a vital role in
bridging the renewable energy supply-demand gap. In 2023, 18
enterprises received a total of 13.49 million kWh of green
power.
Lee further stated that Cathay FHC is dedicated to collaborating
with partners and customers from various sectors to explore more
climate solutions together. On coming July
3rd, the annual "Cathay Sustainable Finance and Climate
Change Summit," will focus on net-zero solutions and sustainable
finance. This summit will feature prominent experts and leading
companies in sustainability, including Sam
Kimmins, Director of Energy at the Climate Group, who will
together share forward-looking perspectives and industry practices.
The event aims to guide Taiwanese enterprises in accelerating
climate action and showcasing Taiwan's industrial achievements and
commitment to net-zero goals on the global stage.
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SOURCE Cathay Financial Holdings