Temasek and HSBC Launch Sustainable Infrastructure Financing Company

By Nick Hedley

Singapore’s Temasek and British financial services group HSBC have launched Pentagreen Capital, a financier of sustainable infrastructure projects in Southeast Asia.

Temasek and HSBC have injected US$150 million of equity into Pentagreen, which aims to make over $1 billion of loans within five years, the new company said in a statement.

“Pentagreen is committed to accelerating the development of sustainable infrastructure in Asia by removing the barriers that can prevent marginally bankable projects from accessing capital,” it said. “It will seek to achieve this through a combination of technical assistance and blended finance to catalyse other sources of capital, with support from its strategic partners.”

The company has partnered with the Asian Development Bank and Singapore’s Clifford Capital Holdings. It will initially target opportunities in Southeast Asia, particularly in clean transport, renewable energy, energy storage, and water and waste management.

Pentagreen will be led by CEO Marat Zapparov, who has worked with the International Finance Corporation, Clifford Capital and HSBC.

“Pentagreen is ideally positioned to be an alternative provider of debt capital to accelerate the development of sustainable infrastructure in Asia,” Zapparov said. “We aim to fill the gap between traditional financing options from banks and development financiers and catalyze the flow of capital to innovative projects by bringing flexible debt financing solutions to the table.”

Pentagreen will operate independently from HSBC and Temasek, although the two founding shareholders will be represented on the company’s board.

The board will be chaired by Kai Nargolwala, who is currently chairman of Singapore Pools and 65 Equity Partners. Other board members include HSBC’s Stuart Lea and Kelvin Tan, and Temasek’s Connie Chan.

Lea, who is head of global banking for South Asia and global head of real assets finance at HSBC, said: “In Asia, many infrastructure projects face varying degrees of barriers to bankability. Pentagreen’s goal is to help remove those barriers and unlock other sources of capital.”

Chan, who is Temasek’s managing director for investment, financial services, said: “We believe that we are in a critical decade to reverse the effects of climate change, and partnerships such as this demonstrate Temasek’s unwavering commitment to playing our part for a more sustainable world where every generation can prosper.”