CDIB Capital Group (CDIB) together with Hon Hai Precision Ind. Co., Ltd. (Foxconn) (TWSE: 2317) signed a Memorandum of Understanding (MOU) on March 9th to jointly establish Kai-Hong Energy Co. to lead capital investment in sustainable development within the green energy industry, thus providing much-needed green power for enterprises and a stable income stream. Total capital for the company is targeted at NT$6 billion.
ESG has become a global development trend, with an outsized influence on industry practices and direction in terms of the environment, such as net zero carbon emissions and adoption of green power. However, the lack of leadership among major enterprises has resulted in supply chains’ willingness to respond, but they have struggled to find ways to do so. Therefore, leading electronics industry player Foxconn, together with CDIB, a professional investment firm, have laid out an innovative strategy for Taiwan's green energy investment by optimizing capital and industrial resources to fill both infrastructure and technical gaps in the future of green energy development. Over the long-term, the company aims to find synergies among industrial electricity demand, institutional financial expertise, and the developer’s green power, thus achieving a triple-win situation.
As a leading venture capital and private equity investor, CDIB has a proven track record of success in infrastructure investments. In 1995, Independent Power Producers (IPPs) were first opened, and CDIB has been actively involved in investing in IPPs, implementing financial planning, and hosting syndicated loans. This cooperation not only combines the technological expertise of Foxconn, but also leverages Foxconn's past experience in investing in solar power plants to expand participation in renewable energy and energy storage investments. By doing so, CDIB will help Foxconn upgrade its energy supply chain for low-carbon and energy-saving purposes.
“Sustainable finance is one of the ESG main objectives of our parent company CDF,” said CDIB Capital's Acting President Melanie Nan. “CDIB is also actively engaged in sustainable investment, including renewable energy, storage technologies, carbon reduction, and any business models for energy saving, environmental purification, or circular economy, such as waste and wastewater treatment, thus assisting enterprises in ESG transformation. CDIB considers this is a great timing to work with Foxconn as the world's leading companies are actively working together with their supply chain partners to jump-start the renewable energy transition to achieve net-zero carbon emissions by 2050.”
Since Foxconn announced its long-term ESG goals, Sustainability = EPS+ESG, last year, it has been actively promoting relevant projects. In order to achieve net-zero emissions in the value chain by 2050, Foxconn has been building its own solar energy, purchasing more green power, investing in renewable energy, and expanding the use of green energy. From the view of sharing a common prosperity, Foxconn hopes to create a green energy investment platform to provide a more diversified net-zero channel for Taiwan’s enterprises.
“Cooperation between Foxconn and CDIB to establish an energy holding company will be the first green energy investment platform in Taiwan established by two leading companies from two different sectors, technology and finance, to jointly assist energy transformation across the industrial supply chain. As suppliers are an indispensable part of the value chain of Foxconn, green energy investment will be first taken up by suppliers of Foxconn through the platform, enabling the realization of low-carbon transformation and implementation in energy conservation and carbon reduction,” said Foxconn spokesman James Wu.
Through this agreement, CDIB and Foxconn have officially taken the first step towards a partnership. Under the global trend of net-zero carbon emissions and energy transformation, the two companies will work together to develop Taiwan's green energy and power business, such as solar energy, wind energy, energy storage, and other infrastructure projects, in line with the government’s goal to accelerate Taiwan's transformation to net-zero emissions.