HSBC and Asian Development Bank join forces in $300m vaccine financing

People fill out personal information forms before getting inoculated against Covid-19 at a vaccination centre in Mumbai. AFP

Europe’s largest bank HSBC and the Asian Development Bank will provide a combined $300 million in financing to help Asia's supply chains boost manufacturing capacity for Covid-19 vaccines, the two lenders said on Friday.

The initiative builds on a risk-sharing scheme the banks launched in July to help to fund suppliers of personal protective equipment as they and vaccine makers race to meet global demand that outstrips supply.

By leaning on the ADB's sovereign-level credit rating, private sector lenders such as HSBC can lend more easily to companies in the complex chain of vaccine supply production, HSBC said in a statement.

"Right now demand for vaccines far outstrips supply and one of the challenges is that supply and distribution networks have to be formed, which requires a lot of liquidity," Surath Sengupta, global head of financial institutions at HSBC, said.

The lenders will offer funds through trade loans and invoice financing among other tools, Mr Sengupta said, as countries across Asia try to shorten the usual multi-year time scale needed to deploy large-scale inoculation programmes.

Vaccination levels in Asian countries have varied widely as governments deal with limited supplies, rapidly rising demand and political jockeying to secure doses.

Leaders of the US, India, Australia and Japan agreed to pool financing, manufacturing and distribution capacity to send 1 billion coronavirus vaccines across Asia by the end of 2022, India's foreign secretary said last month.

HSBC is also adopting various new measures internally to adapt to the new normal.

In February, it announced reducing its London office space by 40 per cent in the coming years as it looks to adopt a hybrid working model for staff in the latest signal of how the pandemic is changing workplace trends.

HSBC said it will halve its real estate footprint globally over the long term, slashing 798,966 square metres of office space worldwide, equivalent to 112 football pitches.