Powering a greener future for the UK

HSBC has played a major role in a USD743 million green loan for a project that will help supply renewable energy to 1.4 million households in the UK and Denmark.

The Viking Link is a planned interconnector joining the two countries’ electricity grids, enabling a more stable and efficient power supply. Scheduled for completion in 2023, the interconnector will help lower energy bills and provide environmental, social and economic benefits for both countries.

The project has been included on the European Union list of Projects of Common Interest because it supports a transition to green energy in line with the ambitions set in the Paris Agreement on climate change.

HSBC supported the green loan deal as joint bookrunner, mandated lead arranger, lender and facility agent for a USD488 million export credit loan supported by SACE, the Italian Export Credit Agency. The facility was structured in compliance with the Loan Market Association’s Green Loan Principles.

Richard Hodder, HSBC’s Global Head of Export and Asset Finance and Head of EMEA Infrastructure, said: “We are very proud to support this milestone project. The Viking Link interconnector will benefit both the UK and Denmark’s power grids, and will allow a more effective usage of renewable energy, a cause the bank is deeply committed to.”

The deal will help to finance the construction of an electricity cable stretching more than 600km under the North Sea. The project is being jointly developed by National Grid and Energinet, the companies responsible for electricity transmissions systems in the UK and Denmark.

More than 40 per cent of Denmark’s electricity comes from wind. On windy days the country’s power grid has a surplus of renewable energy. The new electricity link will make it possible to sell this spare green energy to consumers in the UK, helping to ensure power efficiency. Similarly, the UK grid will be able to sell excess green energy to consumers in Denmark at other times.

Supporting a low-carbon transition

HSBC’s role in the Viking Link deal is just one example of its support for customers in the UK to switch to low-carbon ways of doing business.

The UK aims to become net-zero carbon by 2050. This is one of the world’s most ambitious national targets to combat climate change, and achieving it calls for adjustments in every sector of the economy.

HSBC’s support to help its UK customers make the transition includes:

• Providing loans for small and medium-sized enterprises to make their premises greener by fitting low-carbon electricity sources such as solar panels
• Banking innovative start-ups that pioneer clean technologies such as e-bike delivery services, a greener alternative to petrol vans and motorcycles
• Providing sustainable investment options for retail customers who want to put money into global companies that score highly on environmental, social and governance criteria

Globally, the bank is committed to facilitating USD100 billion in sustainable financing and investment by 2025. It has delivered USD52.4 billion of this target to date.