Bank SinoPac (永豐銀行) is to lend NT$1 billion (US$33.8 million) to GreenHarvest Co Ltd (睿禾) for the construction of a 5 megawatt rooftop solar power station in Hsinchu County, the bank said yesterday.
GreenHarvest would then sell the energy to Nanzong Construction Developments Co Ltd (南榮開發) through electricity retailer Mr.Watt Co Ltd (瓦特先生), the bank said.
It is Bank SinoPac’s first project financing for a renewable energy company that sells power to private firms rather than to state-run Taiwan Power Co (Taipower, 台電), SinoPac senior executive vice president Stephen Ou Yang (歐陽子能) told a news conference in Taipei.
It is also the first project financing for solar energy in the nation, the Bank SinoPac said.
“We had to do some research to evaluate the lending risks. What we concentrated the most on was whether the debtor would have stable revenue resources, as the deal is not a collateral-based loan,” Ou Yang said.
The risks of financing solar power companies selling electricity to Taipower are low, as Taipower tends to buy electricity at fixed prices, using feed-in tariff (FIT) rates that are maintained for 20 years, which provides companies with a stable source of revenue, Ou Yang said.
Given that Nanzong Construction, a unit of Nankang Rubber Tire Corp (南港輪胎), has decent financial strength and should be able to honor its promise to purchase the energy for a decade, the risks for this project are not predicted to be high, he said.
The interest rate for the loan is “competitive,” as the bank hopes to lend money to more renewable energy companies, Ou Yang added.
Bank SinoPac expects more renewable energy companies to choose to sell their power to private companies, as the Ministry of Economic Affairs has been reducing FIT rates over the past few years, Ou Yang said.
“The price at which we are to sell power to Nanzong is not really much higher than the FIT rates, as we do not want to erase clients’ willingness to use renewable energy,” GreenHarvest chairman K.H. Chen (陳坤宏) said.
Nanzong received a discount when buying the power, as the photovoltaics station is mounted on the rooftop of a Nankang Rubber factory, Chen said.
While most renewable energy buyers in Taiwan are technology companies, because of the requirements of foreign clients such as Apple Inc, Nanzong Construction decided to buy the energy for use in its pre-sale housing complex, the Global One (世界明珠), Chen said.
The power station is expected to generate 6 million kilowatt-hours of electricity per year, meaning that renewable energy would make up 20 percent of the power used in the complex, he added.
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