HSBC was the sole arranger for the risk mitigating trade finance facility, including the first green guarantee in the MENAT region and the first sustainable documentary credit facility executed by HSBC globally.
The financing will help Lamprell Energy execute fabrication work on the Seagreen Offshore Wind Farm project off the coast of Scotland, which is a USD $ 3 billion project being built by Seaway 7.
This project is one of the largest in Scotland with the first phase forecast to provide low-carbon energy for around one million homes1.
Lamprell’s scope of work, expected to be completed by the second half of 2021, includes the procurement, fabrication and delivery of 30 wind turbine generator substructures, including the jackets, transition pieces and suction caissons.
“HSBC’s green trade financing facility gives Lamprell the fiscal cushion to position itself as a key contractor in the renewable energy space. We look forward to our continued partnership with Lamprell as they continue to grow their portfolio in clean energy,” said Sunil Veetil, Regional Head of GTRF, HSBC MENAT.
“Even during the challenging times, when we restructured our business years ago up until today, as we navigate through the challenges faced with the global COVID-19 pandemic, the support has always been there from HSBC,” said Tony Wright, Chief Financial Officer and Executive Director, Lamprell. “HSBC has been a pivotal partner as we transition into green energy.”
A regional first for green trade
The transaction is a significant milestone for the wider banking industry in the region and demonstrates a new demand for green trade finance facilities, according to Dan Howlett, Regional Head of Commercial Banking, HSBC MENAT.
“I am delighted that we have secured this green trade finance facility with Lamprell, a long-standing and valued client, and to have been a part of the first sustainable finance guarantee in the Middle East,” he said.
Howlett believes regional clients are increasingly prioritising sustainability in their financing and business decisions, and we expect this trend to accelerate.
“It is also a positive sign of business building back better and tapping into new markets with sustainable growth.”
While Lamprell remains a major contractor to the Middle East’s robust oil and gas sector, during this period of energy transition, it is also positioning itself for the oncoming project wave from the international and regional nascent renewable energy sector.
Most MENA states have laid out ambitious renewable energy goals, with UAE aiming to source 50% of its energy via renewable sources by 2050, Saudi Arabia rolling out contracts to build 58.7 GW of renewable energy capacity by 2032, and Turkey boosting renewable energy’s contribution to its energy mix to 30% by 20202.
Over the long term, renewable energy could provide up to 50% of Lamprell’s turnover, putting the company on a sustainable path. HSBC, which has embarked on its own journey as a facilitator of sustainable finance, is an early supporter of Lamprell’s green evolution.