Taiwanese insurance giants make big moves in renewable energy sector

Taipei, Oct. 22 (CNA) Cathay Financial Holding Co. said on Tuesday it will invest up to about US$900 million in a wind farm development project located off Changhua County, while Fubon Financial Holding Co. revealed it plans to set up a subsidiary focused on renewable energy investments.

Cathay Financial said in a statement that its wholly-owned subsidiary Cathay Life Insurance will invest up to NT$27.32 billion (US$909 million) through Cathay Wind Power Co. to acquire a 50 percent stake in Greater Changhua NW Holdings Ltd. and extend 50 percent of shareholder loans to Greater Changhua NW Holdings and Greater Changhua Offshore Wind Farm NW Ltd. from Orsted Wind Power TW Holdings A/S.

The investment, which the company said has already secured approval from the Financial Supervisory Commission (FSC), the top financial regulator in Taiwan, is the largest ever in the local insurance sector in terms of offshore wind development.

According to Cathay Financial, Cathay Life will take a 99 percent stake in Cathay Wind Power, currently a wholly-owned subsidiary of Cathay Power Co., to lower the stake owned by Cathay Power to 1 percent in order to make the unprecedented investment in the offshore wind power development.

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.

On the same day, Fubon Life Insurance Co., a wholly-owned subsidiary of Fubon Financial Holding Co., said in a statement that a board meeting held on Tuesday approved a plan in which Fubon Life Insurance will set up a new holding company, tentatively named Star Shining Holding.

Star Shining Holding will be in charge of allocation of funds in renewable investments in the future, the company said, adding that a stock transaction will enable Star Shining Energy to become a wholly-owned subsidiary of Star Shining Holding.

Fubon Life Insurance said the transaction is expected to amount to NT$2.4 billion.

According to Fubon Life Insurance, Star Shining Energy -- which specializes in solar energy development -- now has a capacity of about 359 megawatts.

Through this restructuring, Star Shining Holding is expected to lend its full support for the solar energy developer in the future, Fubon Life Insurance said.

The plan to set up Star Shining Holding is pending regulatory approval, the company added.

Fubon Life Insurance said, with the government encouraging the private sector to participate in long-term renewable energy development, the company has decided to invest more in a bid to secure stable returns and boost shareholder value.

Cathay Holding and Fubon Holding are the top two financial holding firms in Taiwan with total assets hitting NT$13.3 trillion and NT$11.78 trillion, respectively, as of the end of the first quarter of this year.

In the first nine months of the year, Fubon Financial raked in NT$121.19 billion in net profit, or NT$8.6 in earnings per share (EPS), to remain the most profitable among the 14 stock market-listed financial holding firms in Taiwan.

Fubon Financial's earnings in the same period were ahead of those of Cathay Financial, which posted NT$103.19 billion with EPS at NT$6.77.