• HSBC launches new unit led by Danny Alexander to focus on climate-related infrastructure projects.
• Target: Capture significant market share in infrastructure finance and project advisory.
• Integration with existing HSBC teams to enhance sustainable finance capabilities.

HSBC’s New Green Initiative

HSBC has unveiled HSBC Infrastructure Finance (HIF), a new unit aimed at tapping into climate-focused infrastructure and project finance opportunities. The unit will be headed by former UK politician Danny Alexander, transitioning from his role at the Asian Infrastructure Investment Bank (AIIB). Starting in November, Alexander will be based in London and report directly to Greg Guyett, CEO of Global Banking & Markets at HSBC.

Strategic Vision

HIF’s primary goal is to secure a substantial share of infrastructure and project finance deals, aligning with HSBC’s commitment to net-zero emissions by 2050. This initiative integrates parts of HSBC’s Global Banking Real Asset Finance team, including infrastructure finance, export finance, and portfolio management. Greg Guyett emphasized, “HSBC has a leading presence in regions where infrastructure financing is critical for a low-carbon economy.“

Market Opportunity

The global shift to a low-carbon economy is expected to require $6.9 trillion annually by 2030, according to the OECD, World Bank, and United Nations. HSBC’s strategic pivot positions it to capitalize on this lucrative market. “Green is the new gold,” highlighting the potential significant returns from supporting global climate efforts.

Collaborative Approach

HIF will collaborate closely with HSBC’s CMB Infrastructure Finance team and oversee Pentagreen Capital, a sustainable infrastructure debt unit launched with Singapore’s Temasek. “Working closely with bankers in both commercial and global banking, HIF will facilitate the deployment of HSBC’s balance sheet, supporting project development in partnership with clients,” according to an internal memo.

Leadership Transition

Until Alexander assumes his role, Alexi Chan and James Dynon will co-lead HIF. This leadership aims to ensure a strong start in reshaping infrastructure finance for sustainability. AIIB President Jin Liqun praised Alexander, stating, “He was instrumental in expanding AIIB’s membership and shaping its strategic direction.“

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Long-term Growth

HSBC plans to hire around 200 personnel across its investment banking and infrastructure unit over the next two years. This expansion is part of a broader strategy to capture macro trends shaping dealmaking. “There will also be dedicated second line infrastructure risk expertise alongside the build-out of our first line teams,” Guyett noted.

HSBC’s launch of HIF underscores its commitment to supporting the transition to a low-carbon economy through strategic infrastructure investments and partnerships. This move is expected to bolster HSBC’s position in the sustainable finance market, driving growth and contributing to global climate goals.