Cathay Life Insurance, Taiwan's biggest insurer, has agreed to form a TWD3.5 billion ($110 million; €97.4 million) joint venture with the island’s largest solar module maker to invest in the island’s renewables sector.
Cathay Life's partner, Neo Solar Power Corporation, is expected to hold around 40 percent of the tie-up, with the insurer owning no more than 45 percent due to regulatory restrictions, a Neo Solar spokeswoman told Infrastructure Investor. New investors may join in as minority shareholders, she added.
The funds will be injected into the new company in two successive phases, the first of which should see about TWD1.5 billion disbursed. The exact scale of the second phase will depend on the results of phase one, Neo Solar said in a statement.
Cathay Life's investment is pending approval from the Financial Supervisory Commission under the Insurance Bureau, a regulator.
The partners' appetite for developing solar facilities owes to the supportive policies provided by the new government, as well as the ability to secure 20-year cash flows through renewables investments, they said.
The Taiwanese government, led by President Tsai Ing-wen, aims to build 20GW of solar power generation by 2025, followed by reforms to open up the power sector to private players. State-owned utility Taiwan Power Company currently procures, transmits and distributes all electricity on the island.
Earlier in July, Cathay Life agreed to co-invest with Swiss-based Partners Group in a greenfield solar platform which will develop up to 550MW of solar capacity in Taiwan.
Neo Solar is also working with its downstream unit, General Energy Solutions, to develop 200MW of solar schemes across the US, Japan and Taiwan, 80MW of which is expected to be completed by the end of this year. The company says it has a development pipeline totalling 800MW.