HSBC increases GBA Sustainability Fund to USD 9bn
The HSBC GBA Sustainability Fund, a debt vehicle launched in May with an initial size of USD 5bn, has been increased to USD 9bn due to a positive market response.
The fund is dedicated to supporting sustainable development and net zero transition for enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) through sustainable finance solutions such as sustainability-linked loans. Target projects will have met the green loan principles or social loan principles of the Asia Pacific Loan Market Association.
Green debt has experienced significant growth in the GBA. In the Guangdong province, green loans amounted to CNY 2.2trn (USD301 bn) in 2022, a 53% year-on-year growth, according to the Guangdong government. In Hong Kong, the issuance of green and sustainable funds hit USD 52.7bn last year, a 100% year-on-year increase, according to a report co-launched by the Hong Kong Monetary Authority (HKMA).
HSBC has recently deployed the fund to provide a USD 100m loan to Hong Kong-based Chevalier Group. The fund will support the building of superstructure of the Jockey Club Key House, the first local co-living project to provide one-stop accommodation and support for out-of-home youth and people in recovery.
The building is expected to attain BEAM Plus Platinum rating for its sustainability performance upon its completion. As a result, HSBC will become the first local bank to issue a loan for a project that meets both the Social Loan principle and the Green Loan principle.
HSBC has provided a green loan, through the fund, for a climate technology firm in Hong Kong. The company focuses on reducing carbon emission from the construction industry through innovative power solutions.
“The GBA is taking the lead in exploring green technology innovation and piloting decarbonisation projects. The green transformation of the GBA is going to require massive capital investment, as well as financial innovations that encourage sustainable development.” Frank Fang, general manager and head of commercial banking for HSBC’s Hong Kong and Macao division, said in a statement.
“Customer response to the HSBC GBA Sustainability Fund has far exceeded our expectation. We are pleased to double the fund size and step up our beyond banking support to help businesses meet their net zero goals and future proof their business models.”
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