HSBC has announced the creation of the HSBC Infrastructure Finance (HIF), a new division focusing on climate-aligned infrastructure and project financing.
According to ESG News, this initiative is in line with the bank’s goal to achieve net-zero emissions by 2050 and underscores its commitment to fostering a sustainable, low-carbon economy.
The HIF will be led by Danny Alexander, formerly of the Asian Infrastructure Investment Bank (AIIB), and will be based in London, reporting directly to Greg Guyett, CEO of Global Banking & Markets at HSBC. The unit is set to begin its operations in November, bringing together key components of HSBC’s existing Global Banking Real Asset Finance team, which includes infrastructure finance, export finance, and portfolio management.
This strategic move by HSBC is aimed at capturing a significant share of the infrastructure finance market, which is crucial as global economies transition towards sustainability. The OECD, World Bank, and United Nations project that an annual investment of $6.9trn will be necessary by 2030 to support this global shift. HSBC’s repositioning to leverage these opportunities highlights the potential for substantial returns. “Green is the new gold,” as emphasized by Guyett, reflecting the lucrative nature of investing in climate-focused projects.
HIF will work in close collaboration with HSBC’s Commercial Banking Infrastructure Finance team and will manage Pentagreen Capital, a sustainable infrastructure debt unit established in partnership with Singapore’s Temasek. This collaborative approach will enhance HSBC’s ability to deploy its balance sheet effectively, fostering project development in alliance with clients.
In preparation for Alexander’s transition into his new role, Alexi Chan and James Dynon will temporarily co-lead the division, ensuring a seamless and robust commencement of the unit. AIIB President Jin Liqun commended Alexander for his pivotal role in expanding AIIB’s membership and influencing its strategic orientation.
Furthermore, HSBC plans to bolster its team by hiring approximately 200 new staff across its investment banking and infrastructure divisions over the next two years. This expansion is aimed at strengthening the bank’s capabilities in capturing macro trends in dealmaking and enhancing infrastructure risk expertise.
Keep up with all the latest FinTech news here.
Copyright © 2024 FinTech Global
