Societe Generale has become the first foreign bank to be granted approval by the Financial Supervisory Commission, Republic of China (Taiwan), to issue Taiwan dollar denominated (TWD) green bonds in Taiwan. The proceeds of the issuance will be used to fund renewable energy projects in Taiwan, including the successful project financing of the Formosa 1 Offshore Wind Project1, Taiwan’s first commercial scale offshore wind farm.

The total issue size of NT$1.6 billion is split into three tranches (5-year: NT$900 million, 10-year: NT$500 million, 15-year: NT$200 million), at respective coupon rates of 0.85%, 1.12% and 1.63%. Societe Generale’s Taipei Branch received a long-term rating of twAA+ from Taiwan Ratings.

This landmark green bond issuance will be supporting the sustainability-related actions from the Taiwanese government to accelerate the use of green energy. Taiwan has set itself a target to increase the share of renewables in electricity generation to 20% by 2025, which will include the installation of 5.5GW of offshore wind capacity, placing it at the forefront of offshore wind development in Asia Pacific.

Hikaru Ogata, CEO of Societe Generale in Asia Pacific comments: “with this first TWD denominated green bond issued by a foreign bank in Taiwan, Societe Generale demonstrates its continued commitment to contributing to the financing of a more sustainable economy. The bank supports the local development of the sustainable bond market, thus enabling its clients to access capital markets as an additional funding source alongside bank lending.”

Subscribed investors included local insurers, securities houses, banks and bills finance companies in Taiwan.

Societe Generale forecasts that Taiwan will see more foreign banks and corporates issuing domestic green bonds as a result of the growing appetite for Taiwan dollar-denominated capital to finance new renewable energy projects in Taiwan, in particular offshore wind projects.

The issuance of the green bonds, also has been recognized as “Positive Impact Bonds” given its alignment with the positive impact bond principles launched in Paris along with United Nations Environmental Program (UNEP). The offering was consistent with the Taiwanese government’s efforts to accelerate the use of green energy, which have spurred the rapid growth of its domestic green bond market, with issuances reaching NT$49.4 billion as of the end of September.

With the “Sustainable and Positive Impact Finance” identified as a strategic growth initiative, Societe Generale aims to develop sustainable and positive impact funding solutions for its clients. It has set itself the objective to contribute to raising 100 billion euro in financing for the energy transition by 2020, with more than 50% having already been achieved this summer.

The NT$1.6 billion worth of issuance was split into three tranches: NT$900 million over a 5-year tenure, NT$500 million over a 10-year tenure and NT$200 million over a 15-year tenure, at respective coupon rates of 0.85%, 1.12% and 1.63%.