Oversea-Chinese Banking Corporation (OCBC) has signed an agreement with the UK government to channel GBP10 billion ($17 billion) of investment into British energy, infrastructure and real estate by 2030.
This is the first such strategic partnership agreement between The Office for Investment of the Government of the United Kingdom of Great Britain and Northern Ireland (Ofl) and a Singapore bank, and the largest inward investment that the OfI has established with an Asian bank.
According to an April 2 announcement, the agreement seeks to promote the UK as a hub for businesses, investors and services involved in the energy transition.
OCBC will also support UK businesses expanding into or establishing operations in Singapore and Southeast Asia. This builds on the UK’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) free trade agreement last year.
UK companies will enjoy greater access to the Asia-Pacific-focused CPTPP markets, and there will potentially be more trade flows into Southeast Asia from the UK, says OCBC.
To achieve these goals, OCBC and the OfI will work together on initiatives to foster knowledge-sharing and facilitate relationships between OCBC and relevant UK businesses, institutions or agencies.
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According to the British High Commission in Singapore, the UK and Asia Pacific trading relationship is worth GBP125.7 billion, with UK-Singapore trade making up GBP22 billion of that.
OCBC’s UK history
OCBC is the first Singapore bank to establish a presence in the UK; its London branch was established 56 years ago in 1969. Having registered about 20% annual revenue growth on average in the last five years, it is now the biggest branch in OCBC’s international network.
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According to OCBC, the London branch’s growth has been driven mainly by real estate, renewables, energy transition, digital infrastructure and core physical infrastructure activities.
One company OCBC has supported in the digital infrastructure sector in the UK is VIRTUS Data Centres (VIRTUS), a majority-owned subsidiary of Singapore-headquartered ST Telemedia Global Data Centres.
With OCBC’s support, VIRTUS has established 17 data centres across four campuses in the Greater London area. VIRTUS has also recently announced ambitious European expansion plans, with upcoming data centres campuses in Germany and Italy.
With this agreement between OCBC and OfI in place, VIRTUS is exploring investing in setting up more data centres in the UK and abroad with support from OfI.
The UK’s Minister for Investment Poppy Gustafsson says: “This GBP10 billion commitment from OCBC is a major vote of confidence in the UK economy. Not only will it help create more opportunities in real estate and infrastructure, but will also back our clean energy industry, a key growth sector identified in our upcoming industrial strategy.”
OCBC’s head of global corporate banking Elaine Lam says: “The UK and Singapore share historically deep ties and OCBC is proud to play a part in further strengthening the relationship with this agreement. Our UK business has grown significantly over the years, driven by developments in sectors such as real estate, renewables, energy transition as well as digital and core physical infrastructure.
"These align with the priority sectors outlined in the UK’s industrial strategy and we will double down on our efforts to drive further growth in these areas. We are also committed to supporting UK companies that are keen to establish or expand operations in Singapore and Southeast Asia," she adds.
