1. The Development of the Green Bond Market in Taiwan

To help green energy technology industries raise funds, and to promote sustainable environmental development, the TPEx promulgated “Operational Directions for Green Bonds” on April 21, 2017.TPEx established the Green bond accreditation Mechanism.On April 29, 2021, the TPEx promulgates “Operational Directions for Sustainable Bonds” and repeals “Operational Directions for Green Bonds” and “Operational Directions for Sustainability Bonds”. Since that, the sustainable bond market includes green bonds, social bonds and sustainability bonds.

2. Definition of the Green Bond

Green Bond indicates the financing tool which all of the funds raised by the issuer are to be used for expenditures or loan on green investment projects, including climate change, environmental protection, renewable energy and carbon reduction…etc.

In accordance with the Taipei Exchange Operational Directions for Sustainable Bonds, bonds with Green Bond Qualification accredited by Taipei Exchange, and applied to the Taipei Exchange for TPEx trading can be listed as Green Bond.

3. The Process of Green Bond Issuing And Listing

  • Corporate Bond (excluding professional board international bond issued by foreign issuers)
    Corporate Bond (excluding professional board international bond issued by foreign issuers)
  • Professional Board NTD-denominated foreign straight bond (for foreign issuers)
    Professional Board NTD-denominated foreign straight bond (for foreign issuers)
  • Professional Board International Bond (for foreign issuers)
    Professional Board International Bond (for foreign issuers)

4. Apply for Green Bond Accreditation

4.1. The Application Documents

An issuer applying for green bond accreditation shall apply to the TPEx by submitting a Sustainable Bond Accreditation Application Form, along with the required documents, and specifying the required particulars.

The required documents shall include:

  • Green bond framework
  • An assessment opinion or certification report issued by a domestic or foreign certification body stating that the framework meets the TPEx Operational Directions for Sustainable Bonds or international market financial practices
  • Documentary proof that the domestic or foreign certification body meets the requirements of the TPEx Operational Directions for Sustainable Bonds
  • A statement from the Sukuk obligors, who guarantee to perform all public announcements and report obligations pursuant to the regulations of the TPEx
  • Other necessary documentary proof or materials
4.2. The process and deadlines for green bond accreditation applications
  • TPEx shall complete the review process within 3 business days after receiving the application documents.
  • An issuer shall apply to the TPEx for trading of the bonds on the TPEx within 2 months from the issuance date of the accreditation certificate.

5. Eligible of Bond Instrument

An issuer issuing the following securities may apply to the TPEx for green bond accreditation.

  • Straight corporate bonds.
  • Financial debentures.
  • New Taiwan dollar (NTD) denominated foreign straight bonds.
  • Foreign Currency Denominated International Bonds, with the exception of securities having equity characteristics.
  • Sukuk (Islamic fixed income security)

In addition to those listed above, Green bonds also include beneficial securities or asset-backed securities for which the issuer applies for TPEx trading pursuant to Article 7-1 of the TPEx Rules Governing the Review of Securities for Trading on the TPEx.

6. Use of proceeds of Green Bond

Proceeds of Green Bonds must be exclusively applied to invest, finance or re-finance in full new and/or existing eligible Green Projects.

  • To pay for the expenditures of green projects
  • To pay back the debt incurred in the green investment of green projects
  • To provide loans to green investment projects (If the bond issuer or Sukuk obligor are financial institutions.)

As for beneficial securities or asset-backed securities, all of the assets in the asset pool should come from green investment projects.

7. Categories of Eligible Green Projects

In accordance with the Taipei Exchange Operational Directions for Green Bond, categories of potential eligible Green Projects are listed below. These projects must be substantial improvement to benefit the environment. The eligible green projects are listed below.

  • Development of renewable energy and energy technology.
  • Improvement of energy efficiency and energy conservation.
  • Greenhouse gas reduction.
  • Waste recycling or reuse.
  • Agricultural and forestry resource conservation.
  • Biodiversity conservation.
  • Pollution prevention and control.
  • Water resource conservation, purification, or reclamation, recycling, and reuse.
  • Other climate change adaptation or matters approved by the TPEx.
    The green investment plan mentioned in the preceding paragraph shall not be a fossil fuel power generation project, but it is not limited to those that meet the technical selection criteria set by the green bond standards adopted in customary practice in international financial markets.

8. Green Bond Framework

An issuer applying for green bond accreditation shall adopt a Green Bond Framework, which shall include the following content:

  • Description of the green projects and the benefit of the environment.
  • Process of selection and assessment of the green projects.
  • Plan for management of proceeds.
  • Post-issuance proceeds allocation report(including the environmental benefits).

9. The Information Disclosure of Green Bonds

Before the issuance of bond Requirement
Green Bond Framework Assessment opinion or certification report issued by certification body for the Green bond framework.
After the issuance of bond Requirement
Annual report An assessment opinion or certification report issued by certification body for the annual report.

10. The Information Disclosure of Green Bonds

Before the issuance of bond Requirement
The prospectus Issuers should disclose the Green Bond
Framework in their prospectus.
Market Observation Post System (MOPS) Issuers should disclose such information on the MOPS: The Green Bond Framework and the assessment opinion or certification report issued by certification body.
After the issuance of bond Requirement
Annual report An issuer shall report the status of use of the funds and the assessment opinion or certification yearly during the life of the green bonds or the period of use of the funds raised by the bonds.