Image Credit: Taiwan News
Taiwan’s Cabinet is set to allocate NT$100 billion (US$3 billion) in the 2025 budget to prevent Taiwan Power Company (Taipower) from filing for bankruptcy. The decision, reported by CNA on Tuesday (Aug. 13), follows the government’s efforts to stabilize the company amid rising international energy prices and significant financial losses.
The government has already earmarked NT$250 billion in recapitalization funds, along with an additional NT$50 billion under a post-pandemic special act, with a further NT$100 billion expected in the 2024 supplementary budget. This brings the total financial support for Taipower to NT$500 billion.
The Ministry of Economic Affairs (MOEA) and Taipower have expressed optimism that timely approval of these allocations by the Cabinet could help the company avoid further financial losses this year. Taipower, which has been absorbing the impact of high energy costs to stabilize electricity rates, has seen its accumulated losses soar to NT$382.6 billion by the end of 2023.
Despite these measures, concerns remain about Taipower’s financial stability. With a capital of NT$580 billion, the company could still face bankruptcy due to its severe accumulated losses. Under the Company Act, if a company’s assets fall short of covering its liabilities, the board of directors is obligated to file for bankruptcy.
The MOEA highlighted the importance of Taipower in Taiwan’s ongoing energy transition and its role in achieving net zero emissions. The allocated funds are expected to play a critical role in supporting the company’s operations and ensuring its financial viability in the face of mounting challenges.