Taiwan’s Cathay Life to spend up to $3.3bn on solar

Cathay Life, Taiwan’s biggest insurer, could allocate up to NT$100 billion ($3.32 billion; €2.79 billion) to increase its investments in the solar sector in the coming years.

The insurer told an analyst meeting last week that credit risks were mitigated through signing PPAs with Taiwan Power Company, the state-owned utility, and that returns for solar investments could reach 6-7 percent, which it felt was a safe level for Taiwan dollar-denominated investments.

Chief investment officer Joseph Wang said the insurer had committed over NT$1 billion to solar power generation since last year and it was now evaluating other opportunities in the market. 

In July 2016, the insurer agreed to co-invest with Swiss-based Partner Group in a greenfield solar platform to develop up to 550MW of solar. It followed this up with a joint venture with Neo Solar Power Corporation, Taiwan’s largest solar module manufacturer, the following month to build new solar facilities on the island.

With total investment assets of NT$5.2 trillion, Cathay Life now holds NT$210 billion in cash and 2.1 percent of its portfolio allocation, which is about NT$109.2 billion, in alternatives excluding properties, as of this June. 

In addition to domestic capital, international manager Equis Energy is also boosting its Taiwanese solar footprint.
Singapore-based Equis won a contract on Tuesday to build a 70.2MW solar plant in Chiayi County’s Yizhu Township, from Taiwan’s Ministry of Economic Affairs’ Bureau of Energy. Under the government’s tender rules, Equis has the right to sign a 20-year PPA with TaiPower. The project, covering 79.5 hectares of land, is set to be the island’s largest solar facility upon completion by mid-2018. 

Equis is one of the largest renewable energy developers in Taiwan, with 100MW of solar assets under construction and advanced development and 581MW of utility-scale solar and wind projects in the pipeline. 

The Taiwanese government is looking to achieve ‘nuclear-free’ generation by 2025 by increasing renewable energy’s contribution to the power mix. It aims to have 28GW of renewables, including 20GW of solar, 1.2GW of onshore wind and 3GW of offshore plants, installed in the next eight years.