HSBC has issued its first green trade finance facility in the Middle East and North Africa region, raising US$48 million for UAE-based Lamprell to support execution of its fabrication work on the Seagreen offshore wind project off the coast of Scotland. HSBC was the sole arranger for the innovative facility, which is also the first green guarantee in the MENA region.
In June 2020, Lamprell became a subcontractor on the Seagreen project in the North Sea, located near the Angus coastline in Scotland. The project involves building and installing 114 wind turbine generators. Lamprell was mandated to fabricate 30 of the 114 jackets and suction base foundations for the generators.
Christopher McDonald, Chief Executive Officer of Lamprell, added: “We expect renewable energy projects to comprise an increasingly large percentage of our revenue so it is important for us to have access to this type of financing, which is not only aligned to our green agenda but is also structured efficiently. It is vital that banks and corporates work together closely to further deepen the green finance market in the Middle East, supporting the global and regional transition to a low-carbon future.”
Lamprell approached HSBC for project-specific trade financing in preparation for its role on the Seagreen project. HSBC created a bespoke green facility comprising guarantees, import loans and documentary credits.
Also in 2020, HSBC announced a plan to prioritise US$1 trillion in financing and investment that supports the transition to a net zero global economy, in accordance with the Paris Agreement. HSBC also stated its own aim to be net zero in its operations and supply chain by 2030.
Daniel Howlett, HSBC’s Regional Head of Commercial Banking for the Middle East, North Africa and Turkey (MENAT), said: “This transaction demonstrates the commercial viability of green finance in the Middle East for issuers beyond sovereigns, financial institutions and the largest multinational corporations. Sustainable growth is more important than ever before for businesses that want to build back better from the Covid-19 pandemic and HSBC is proud to be leading the development of the green finance market in the Middle East.”
The Seagreen offshore wind farm is a 1,075 MW project, located 27 km off the Angus Coast in the Firth of Forth. It will be developed and operated by Seagreen Wind Energy Limited. Once constructed, the wind farm will be the largest in Scotland and Phase One is expected to provide low carbon energy for around one million homes.
In September 2019, Seagreen secured a 15-year CfD contract awarded by the UK government. SSE Renewables is leading on the development and construction of the first 1,140 MW phase, supported by Total, and will operate the asset on completion, which is expected in 2022/23. The project will feature 114 MHI Vestas V164-10 MW turbines.
