HSBC and Singapore-based investor Temasek have launched a joint venture to provide debt finance for sustainable infrastructure projects.
The $150 million partnership will be based in Singapore and initially focus on investing in Southeast Asia and back projects that address the challenges and opportunities presented by climate change. HSBC said many infrastructure developments in the region face barriers to bankability and believes private capital can play a role in financing the sector.
Over the longer term, HSBC and Temasek hope to scale the platform up to over $1 billion of loans within five years.
The platform will also be supported by the Asian Development Bank and Clifford Capital Holdings with ADB providing technical assistance and project development expertise and CCH providing project finance expertise and ongoing operation mid and back office support.
Dilhan Pillay, chief executive officer of Temasek International, said: “As an investor committed to sustainability at our core, we are keen to explore innovative solutions to address critical infrastructure needs especially in emerging markets in Asia, that will contribute to the transition to net zero. Public funding alone will not cover the scale of climate change mitigation and transition required across Southeast Asia.”
The platform will use internationally recognised ESG best practice including the FAST-Infra Sustainable Infrastructure Label to measure sustainability outcomes through loans provided.
Target areas will include renewable energy and storage, water and waste treatment and sustainable transport with an aim of meeting carbon reduction targets and building resilience to offset the impact of climate change.