Tue, Nov 12, 2019 - Page 12 News List

Green loans to rise next year: Koo

By Kao Shih-ching  /  Staff reporter

Green lending is expected to see rapid growth next year on higher demand from offshore wind developers as their projects enter the construction phase, Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) said yesterday.

The outstanding loan balance in green financing totaled NT$1.1 trillion (US$36.14 billion) as of the end of September, an increase of NT$60 billion from the end of last year, Koo told lawmakers on the Legislative Yuan’s Finance Committee.

However, that increase did not meet his expectations of NT$200 billion for this year, he said.

Democratic Progressive Party (DPP) Legislator Tsai Yi-yu (蔡易餘) asked Koo why green lending had not risen faster this year, given that many local or foreigner developers have been looking for support from local banks.

Koo said that while some banks have established partnerships with developers or participated in syndicated loans, they have not been offering much funding for as most offshore wind projects have not begun.

Most banks offer the funds to developers based on projects’ development schedules, so most funding would be offered when the wind farms are being constructed, he said.

“Given that many wind farm projects will begin their construction phase next year or at a later, we expect green lending to advance quickly in the next few years,” Koo said.

Private banks are more proactive on green lending compared with their state-run peers, Tsai said, adding that Cathay United Bank (國泰世華銀行), Taipei Fubon Commercial Bank (台北富邦銀行), CTBC Bank (中國信託銀行) and E.Sun Commercial Bank (玉山銀行) have worked with offshore wind developers.

Asked if state-owned banks might become more open-minded about green lending to offshore wind industry, Koo said that he thought it would be unlikely, because it is more difficult to estimate the risks of offshore wind projects.

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