Taiwan is considering selling debt for the first time to finance overseas investments as it intensifies efforts to resist the diplomatic isolation imposed by China, officials familiar with the matter said.
The department of the Ministry of Foreign Affairs responsible for international aid is preparing the issuance of sustainable development bonds likely denominated in New Taiwan dollars, with an initial size equivalent to as much as US$200 million, the officials said, asking not be identified discussing private deliberations.
The financing raised by the International Cooperation and Development Fund (ICDF) would mainly go toward projects abroad, potentially including those related to green energy infrastructure, renewable-powered computing centers for artificial intelligence (AI) and remote sensing systems monitoring climate change, they said.
Photo: I-hwa Cheng, AFP
A new source of funding for overseas ventures would give Taipei more financial muscle to counter Beijing’s efforts to isolate the nation.
The ICDF’s first attempt at tapping debt markets follows efforts by Taiwan to leverage its economic strength to expand the nation’s sway overseas, wielding its technological edge as a weapon to deter adversaries and a tool to engage with others. After taking office in 2024, Minister of Foreign Affairs Lin Chia-lung (林佳龍) announced the establishment of a task force to promote economic diplomacy through cooperation between different ministries.
The ICDF, which holds about NT$15 billion (US$471.3 million) in assets, is consulting with authorities, including the Financial Supervisory Commission and the Taipei Exchange, to clear regulatory requirements, the officials said.
The bond issuance requires regulatory approval, because it would be the first time a non-profit private entity, sometimes used for government projects, has sought to borrow money from the public this way.
In response to a request for comment, the fund’s spokesperson said the option of borrowing is still under discussion and has not been finalized.
Founded in 1996, the ICDF is at the forefront of programs to provide aid to Taiwan’s diplomatic allies, with agriculture and healthcare as its main focus areas.
The scope of its development projects has recently been expanding to fields such as AI applications, including in countries without official diplomatic ties with Taiwan — with the Philippines being one such example.
Taiwan has also backed a plan to build an AI computing center in Paraguay, one of the officials said.
The project, which is not linked to the possible bond fundraising, is already under way in the Latin American nation that recognizes Taiwan, the official said, adding that using the bonds for AI computing centers in the future remains under discussion.
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