HSBC HSBC Holdings PLC

By Fabiana Negrin Ochoa

HSBC Holdings PLC and Singapore state-investment firm Temasek Holdings Pte. are contributing a combined $150 million as equity capital to establish a company focused on financing sustainable infrastructure in Asia.

The company, called Pentagreen Capital, aims to provide more than $1 billion in loans for sustainable infrastructure construction in the next five years, HSBC and Temasek said in a joint statement Tuesday.

Pentagreen will operate independently from HSBC and Temasek, which will be represented on its board, according to the statement. Marat Zapparov, previously of International Finance Corporation, will serve as chief executive. The board will be chaired by Kai Nargolwala, who holds the same role at Singapore Pools Pte.

Pentagreen, which will initially focus on opportunities in Southeast Asia, aims to serve as an alternative source of capital for projects that could otherwise struggle to secure funding. Its main target areas will be clean transport, renewable energy and energy storage, and water and waste management, though areas such as climate adaptation and land use will be considered in future.

"We aim to fill the gap between traditional financing options from banks and development financiers," Mr. Zapparov said.

The Asian Development Bank, one of Pentagreen's strategic partners, has estimated that Asia will need to invest about $26 trillion between 2016 and 2030 on infrastructure to maintain growth momentum, address poverty and respond to climate change.

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

August 30, 2022 03:43 ET (07:43 GMT)

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