Chailease Plans Solar-Backed Bonds on Taiwan Clean Power Push

  • Notes will be backed by power purchase agreements with utility
  • Taiwan wants renewables to supply 20% of electricity by 2025

A Taiwanese solar-farm operator is planning to sell the market’s first solar asset-backed securities as new government policies encourage the development of clean energy industries.

The planned bonds from Chailease Finance Co., primarily a leasing company providing machinery, vehicle and aircraft financing, will be backed by solar-power purchase agreements with state-owned Taiwan Power Co., according to an official at CTBC Bank Co., an underwriter of the deal, who asked not to be identified because he isn’t authorized to speak publicly. 

Under President Tsai Ing-wen, elected in January in part on a anti-nuclear energy platform, Taiwan is pushing for renewable energy sources to account for 20 percent of the economy’s electricity supply by the year 2025. The government will more than double solar power capacity from the end of last year by a 1.44-gigawatt expansion over the next two years, the Taipei-based Commercial Times reported this month.

The power-contract backed securities may be the first of its kind offered in Taiwan, the bank official said. Chailease, the third-largest owner of solar power plants in the island, is optimistic about the local solar industry’s development and about the products, which generate stable returns, CTBC said in statement on Tuesday.

Chailease’s asset-backed bond sale will offer tenors of more than 10 years. The company will also sell NT$4.97 billion ($157 million) of bonds backed by non-solar related leasing, mortgages and other debts today, according to the bank official. It will offer a portion of five-year notes at 1.9 percent and another portion of same-tenor debt at 2.45 percent, with life insurance companies making up the majority of subscribers.

— With assistance by Miaojung Lin, and Feifei Shen

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