The broad shift towards renewable energy in the US will continue even under the incoming administration of Donald Trump, said the head of the Americas arm of Japan’s largest banking group, Mitsubishi UFJ Financial Group.
President-elect Trump’s anti-renewables rhetoric has not prompted a change in strategy, MUFG Americas chief executive officer Kevin Cronin told Reuters in an interview.
“The new administration will be more constructive on fossil fuels, but that doesn’t mean renewables go away,” Cronin said.
Projects take several years and often multiple election cycles to plan, finance and build, Cronin noted, adding “we try not to time our strategy around things beyond our control”.
While the bank had received a fillip from the infrastructure and renewables projects coming from President Joe Biden’s Inflation Reduction Act, soaring energy demand from the data centres that power artificial intelligence is where growth lies, Cronin said.
“We’re at the peak of the hype cycle of AI, but it’s real and it’s big,” Cronin said.
Data centre capacity will double by 2030 and securing reliable power is an increasingly strategic part of data centre location, Cronin said.
Masatoshi Komoriya, chairman of the board at MUFG’s Americas subsidiary who was interviewed at the same time, said the bank had adopted a flexible approach incorporating renewables and fossil fuels to meet data centre demand.
That was particularly important as different states set different rules around the financing of renewable and non-renewable energy projects.
Financing of renewable energy projects has been central to MUFG reaching pole position in project finance loan volume in America over 14 consecutive years.
MUFG sold its US retail banking arm in 2022 and now focusses exclusively on wholesale banking and markets, but nevertheless the U.S. business accounted for almost 30% of the group’s total profits in the year to March 2024.
The US operation has been strengthening its mid-market offerings in areas of competitive advantage, such as technology, and is actively increasing personnel, having already hired around 30 people from Silicon Valley Bank, which collapsed in 2023, Komoriya said.
“I think we have a more balanced platform than we did 10 years ago,” Cronin said.
Reuters
