Mena companies can tap $1bn HSBC climate tech fund

Reuters/Jihed Abidellaoui

• Cash for climate tech entrepreneurs
• Food, energy, transport among targets
• VC funding fell 40% this year

HSBC has set aside $1 billion to help finance early-stage climate tech companies around the world, and “transformative investment opportunities” exist in the Middle East and Turkey, according to its regional chief. 

“The Middle East has a key role to play in the transition to a net zero global economy,” said Patricia Gomes, regional head of commercial banking at HSBC Menat. 

“With Cop28 happening in the UAE this year, the focus on finance for climate-related projects from our clients around the region is a clear signal of the transformative investment opportunities that exist. We look forward to active discussions on how we can put this financing to work.”

The financing is expected to help startups developing technologies across the fields of EV charging, battery storage and carbon removal, among others. 

The fund’s target sectors are clean energy; sustainable manufacturing; sustainable food, agriculture and land; clean mobility and transport; greenhouse gas emission capture and storage; sustainable built environment and sustainability management and reporting, an HSBC spokesperson told AGBI.   

The bank said it wants to increase its support for climate tech entrepreneurs in an environment where tight market conditions in venture capital have made funding for startups scarce.

It cited research published in June by industry body CTVC showing that funding for climate tech companies dropped by 40 percent year on year in the first half of 2023. 

“HSBC’s climate tech proposition aims to enable these critical technologies to reach the market more quickly at scale,” the bank said. 

Almost half the emissions reductions required to reach net zero by 2050 will come from technologies that are currently in the demonstration or prototype stage, according to the International Energy Agency. 

And while the majority of global early- and growth-stage climate tech investment has traditionally focussed on the US and Europe, HSBC’s $1 billion allocation plans to focus on “high-potential companies wherever they are in the world”, including in the Middle East, Turkey and North Africa, the bank said. 

However, applicant companies must already have some level of VC backing, the HSBC spokesperson told AGBI. The other criteria for investment is that they operate in one of the fund’s target sectors. 

“We have full flexibility across all these [target sectors] and will look at opportunities across all of our markets globally,” the spokesperson said. 

The spokesperson could not say how many projects this is likely to finance, but added: “We believe it will make a considerable difference to the companies we invest in.”