Head of Project Finance & Corporates
May 2022The Corona pandemic has ruthlessly exposed Germany's backwardness in terms of digitization and fast data lines. The war in Ukraine has made the issue of infrastructure even more topical and important. Hamburg Commercial Bank has been very involved in forward-looking infrastructure projects for years - and is now stepping up its commitment once again.
Financing infrastructure projects has long been part of Hamburg Commercial Bank's core business. But the commitment has rarely been more important and in greater demand than it is today. Although interrupted supply chains and the expected "second-round effects" are challenging for the entire economy, the bank sees an increasing need for financing for forward-looking as well as sustainable infrastructure projects right now.
"We have committed around one billion euros to infrastructure projects in Europe over the past twelve months and aim to match that volume this year," says Christopher Brody, chief investment officer at HCOB. "In view of the devastating war in Ukraine and the associated uncertainties, we have set our sights high with this. And, of course, we will be watching developments very closely and managing our activities prudently and flexibly. But we are convinced that important infrastructure projects are urgently needed right now."
Jens Thiele, Head of Project Finance and Corporates at HCOB, adds: "We focus on digital and social infrastructure projects as well as innovative projects in traditional infrastructure, such as transport networks. In addition, investments in the production, transmission and storage of alternative energy sources are needed right now in order to be less dependent on energy imports in the future. This also includes the expansion of bridging technologies, such as the construction of port and storage terminals for liquefied gas tankers. "
In the past twelve months, around 60 percent of HCOB's new business volume was attributable to the construction and operation of data centers and the expansion of fiber-optic networks, which consume significantly less electricity than conventional copper networks and thus reduce emissions of climate-damaging carbon dioxide. The expansion of this digital infrastructure is one of the investment projects funded throughout Europe and forms the basis for the use of 5G technology. The demand for fast and reliable Internet connections is high: private individuals need fast Internet for their home offices. And on the corporate side, a stable digital network connection and modern, high-performance data centers are indispensable. Only with digitized business processes and up-to-date, energy-efficient technology can they be competitive and at the same time make an important contribution to greater environmental protection.Companies, but also governments, are being asked to step up their support for the necessary infrastructure investments now. "Public funds and well-structured financing models will play an important role in ensuring that companies are willing to invest despite the current uncertainties," says Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. Investment support for transport services and infrastructure is an important issue in view of decarbonization, digitization and public infrastructure. In the German government's budget, investments of around 50 billion euros per year are earmarked until 2026, a significant portion of which is for infrastructure. In order to realize these investment projects and integrate the funding, strong and professional financing partners will continue to be required in the future.
Hamburg Commercial Bank has been financing infrastructure projects in Germany and Europe for more than 20 years, making it one of the pioneers in the industry. The bank has extensive experience in integrating promotional loans from KfW or the European Investment Bank and in public-private partnerships, as well as in integrating export credit cover. "Particularly in the financing of digitalization and IT - a sector that is important for the transformation of the economy toward greater sustainability - we have developed a very good track record, which we are building on today," says Thiele. "We continue to see high demand for financing in the market, despite the difficult economic environment. Our customers appreciate our experience, especially now, as we structure complex projects for them individually, promptly and reliably."