HSBC Forms Team for Infrastructure Funding
HSBC Holdings Plc has created a specialized team aimed at financing infrastructure projects that typically have a hard time attracting investment from traditional sources, according to insiders.
The bank is in search of a global leader for strategic financial partnerships. However, they’ve requested that discussions about civil matters remain undisclosed. Although HSBC started seeking candidates for this position—likely based in the United States—several months ago, they have yet to finalize their choice. This position reports to Danny Alexander, who is the CEO of Infrastructure Finance and Sustainability within HSBC’s Corporate Investment Banking Unit.
A spokesperson for HSBC chose not to provide any comments.
New team members will work on a small global scale, focusing on “blend finance” transactions that combine concessional and commercial capital for infrastructure endeavors.
Blend finance aims to merge private and public funding for sustainable projects, particularly in developing nations. A significant challenge remains in creating a risk-reward arrangement that can attract adequate private investment.
The newly established team will aim to forge partnerships similar to the Singapore-based debt finance platform Pentagreen Capital. HSBC formed a collaboration with state investment fund Temasek Holdings Pte. to establish Pentagreen, which is focused on assets in renewable energy, storage, water, waste management, and transportation infrastructure.
Citigroup Inc. and Sumitomo Mitsui Banking Corp. are also working on new opportunities within the blend finance market. A report from Convergence, released in May, indicated that these transactions amounted to $18 billion last year, a decline of 21% compared to 2023. With the U.S. pulling back on its developmental aid commitments, the blend finance sector is witnessing a drop in public investment.
HSBC’s move to create this new blended finance team coincides with significant changes throughout the bank, including a global restructuring effort aimed at cutting costs by around $3 billion. This restructuring entails the discontinuation of certain services, like equity underwriting and advisory, while focusing on core operations primarily in Asia and the Middle East.
