HSH Nordbank to Push Renewable Lending Past $1.1 Billion

  • State lender taps energy as it sheds soured shipping loans
  • Poland, Germany and France identified as target markets

HSH Nordbank, the state-owned lender based in Hamburg, plans to boost project-finance loans for clean energy to more than 1 billion euros ($1.1 billion) for the first time next year, highlighting its confidence in the industry’s outlook.

The bank was the biggest project finance lender in Europe in 2014 and strives to retain a dominance in lending to green companies, said Lars Quandel, head of HSH’s energy and infrastructure unit. The bank, whose outstanding project finance is valued at about 4 billion euros, sealed about 900 million euros in fresh funding for clean energy projects this year, almost half of which came in the fourth quarter, Quandel said.

“Our goal is to crack the billion mark in project funding,” said Quandel in an interview in the German port city. “New Year business should be similar to 2015, but we want to grow including in Scandinavia -- foremost in Sweden and Norway.”

HSH’s renewable energy lending may take on a more significant role as it sheds soured loans from its shipping business into a bad bank. The bank has been lending on clean energy including hydro power projects for 25 years.

EU Deal

The states of Hamburg and Schleswig-Holstein, which own 85 percent of HSH, plan to create the bad bank by the end of the year as part of an Oct. 19 deal with the EU to cut in half HSH’s distressed loans and sell the bank to an investor by 2019 at the latest. Bad debt accounted for one-quarter of its total credit book at the end of September, according to HSH.

HSH also hopes to do business in Poland, assuming the market matures, as well as in established markets such as Germany and France. It’s looking for projects to back in southern Europe that already have power purchase agreements, Quandel said.

The bank may also match or expand its loans to German clean-energy companies next year, compared with the 250 million euros to 300 million euros lent this year, said Quandel. The bank’s corporate lending in clean energy is limited to Germany while project finance is Europe-wide, he said.

HSH total new-lending business dropped 9 percent to 6.4 billion euros an annual basis in the first nine months as a delay in the EU restructuring decision by several months deterred clients, Chief Executive Officer Constantin von Oesterreich said on Dec. 4.

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