HSBC Ireland planning to invest millions in green projects here

Investment in renewable projects is on the way as HSBC Ireland CEO warns SMEs to embrace green, writes Sean Pollock

ALAN Duffy, the chief executive of HSBC Ireland, has said the global bank’s Irish subsidiary is set to finance a significant number of green projects in the country next year.

HSBC Ireland, which provided Ireland’s first so-called “green loan” worth €77.3m to developer Ballymore, which is set to help fund the construction of three offices in Dublin, said it was set to sign mandates for the projects in the first quarter of 2020. The projects will be a mixture of wind energy, renewables and waste treatment.

Duffy (inset right), speaking as the bank celebrated 40 years in Ireland, said the capital demand for renewables and green projects in Ireland is huge. He said the projects would be worth “several million euro”.

“We are a wholesale bank, so these won’t be small amounts, these will be significant,” he said. “I have to caveat that this is an ultra-competitive area. We will put our best foot forward.

“There is a lot of capital required in this area, both here in Ireland and globally. There will be a lot of interest. We will see more competitive pricing, aggressive tendering because the amount needed here is just enormous.

Duffy added that he believes the bank has “early-mover advantage” in Ireland following its Ballymore investment. He said companies would also be attracted to HSBC’s “massive connectivity with a deep-pool of investors globally, especially in Asia, where there is a wall of capital available”.

HSBC has allocated $100bn (€90.68bn) to sustainable financing by 2025, with $46bn deployed to date. Duffy said that HSBC believes that there is a “$90trn need” in this space by 2030. “The real trend I am picking up is the pace of change in this area needs to be increased,” he said.

Last week, HSBC released Navigator, a survey of companies taken globally, which showed that just over half of Irish companies felt they had a role to play in delivering on the UN’s sustainable development goals. The number compared to 75pc in the UK and two-thirds globally.

With the results in mind, Duffy warned that Ireland’s

SMEs could risk exclusion from the supply chain of multinationals, which make up the bulk of its Irish portfolio, if they don’t embrace the green agenda. “If you are looking or supplying a multinational, OK, you can distinguish yourself on price and quality, but increasingly it is coming down to your environmental credentials which will differentiate you, and in some extreme cases, exclude you,” he said. “You could actually lose business by not adhering to the requisite demands around the sustainability piece.”

The result of the Navigator survey also showed that the UK’s importance as a trading partner for Irish companies was declining. Some 43pc of Irish businesses see Britain as “an important trade partner”, down from 73pc last year. Duffy said this was part of a trend, with eurozone and Asian markets growing in importance.

Reflecting on the Brexit effect in Ireland, Duffy added that the Irish subsidiary had noted an increase in the number of Asian clients investing in Ireland. He said the number his bank had provided support to had doubled over the last three years.

“It’s a huge vote of confidence in the economy,” he said. “We beat ourselves up a lot in this country, but the companies I see trading internationally and the reputation Ireland has for doing business is absolutely phenomenal.”