HSBC acted as a Mandated Lead Arranger (MLA), an original lender and the agent bank in a $258 million Export Credit Agency (ECA) loan for The Kingdom of Saudi Arabia’s Ministry of Finance (MoF).
The proceeds of the loan, which is the first Green ECA loan in Saudi Arabia, are being used to purchase buses from Germany for Saudi Arabia’s public transport network. The buses will help reduce the greenhouse gas emissions and air pollution as well as alleviate traffic congestion in the metropolitan Riyadh area through a shift towards public transportation.
The loan documentation confirms a commitment to report on positive environmental impacts of the underlying project. In recognition of the use of proceeds and reporting features of the facility, it is compliant with the “Green Loan Principles”, published by the Loan Market Association on 21 March 2018.
This loan is supported by the official ECA of the Federal Republic of Germany – Euler Hermes Aktiengesellschaft. Loans backed by ECAs are increasingly popular with regional borrowers as a means of diversifying their funding sources while securing attractive financing terms.
Gareth Thomas, HSBC’s Head of Global Banking, Middle East, North Africa and Turkey, said: “Saudi Arabia is embarking on one of the world’s most ambitious economic transformation programmes and by securing its first ever Green ECA financing it has once again demonstrated its regional leadership in debt markets. HSBC was delighted to play a part in another important milestone for the Kingdom.”
HSBC traces its origins in Saudi Arabia back almost 70 years, during which time it has been an active partner supporting the Kingdom’s economic growth and development. HSBC Group, through its subsidiary and affiliate operations, is the leading international banking and financial services provider in the Kingdom.
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HSBC in the MENAT region
HSBC is the largest and most widely represented international banking organisation in the Middle East, North Africa and Turkey (MENAT), with a presence in nine countries across the region: Algeria, Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia, Turkey and the United Arab Emirates. In Saudi Arabia, HSBC is a 29.2% shareholder of Saudi British Bank (SABB), and a 51% shareholder of HSBC Saudi Arabia for investment banking in the Kingdom.
This presence, the widest reach of any international bank in the region, comprises some 350 offices and around 9,500 employees. In the year ending 31st December 2019, HSBC in the MENAT region made adjusted profit before tax of US$ 1,611m.
© Press Release 2020