National loan guarantee mechanism aims for contract signing by end of May; public and private banks to contribute over $470 million

Central News Agency, Taipei, May 23. The national loan guarantee mechanism to support corporate investment in the US is moving forward. According to preliminary information, eight public banks plan to contribute a total of $350 million. Combined with private banks such as CTBC Bank, Fubon Bank, and E.Sun Bank that have announced their participation, the total contribution is expected to exceed $470 million. Officials from the National Development Council (NDC) explained that after signing contracts with the banks at the end of May, they will begin accepting applications. Following the establishment of the "Taiwan Model" strategy in US-Taiwan tariff negotiations, the NDC planned the "Loan Guarantee Mechanism for Supporting Corporate Investment in the US" to assist Taiwanese companies in investing in the US and implement supply chain cooperation. The first phase funding target is over $1.2 billion, with the National Development Fund contributing at least $800 million. Considering the different asset sizes and credit limits of financial institutions, the mechanism has set tiers of $75 million, $50 million, and $25 million, to be implemented in five phases, inviting both public and private banks to participate. Insiders revealed that the eight public banks have already set their contribution levels: Bank of Taiwan plans to contribute $75 million; Mega Bank, First Bank, Hua Nan Bank, and Taiwan Cooperative Bank plan to contribute $50 million each; and Land Bank, Chang Hwa Bank, and Taiwan Business Bank plan to contribute $25 million each, totaling $350 million. Adding the contributions from CTBC, Fubon, and E.Sun, the total exceeds $470 million. Furthermore, NDC officials explained that in addition to these three, four other private banks have joined, totaling seven. Bank executives stated that to respond to government policy and assist Taiwanese businesses in "moving east," financial institutions will provide strong support. Since each bank has a different scale and needs to consider return on assets, they have planned their contributions according to their own capabilities. In addition, the United Daily News reported that the "Taiwan Tower" project, which CPC Corporation Taiwan plans to build on land it owns in Houston, US, could be the first case for the mechanism. NDC officials explained that according to the current schedule, it must wait until the contracts are signed in late May or early June, so it is not necessarily the first case. Officials emphasized that the national loan guarantee mechanism still focuses on Taiwan's semiconductor and supply chain sectors and manufacturing investment in the US. As for the Taiwan Tower project, if it is positioned as a US-Taiwan industrial cluster, it might meet the requirements, and the inter-ministerial team will review the application plans later.