Hong Kong government to issue $175.5bn green bonds in next five years

According to Chan’s 2021 budget, the government’s green bond programme will be scaled up and its borrowing ceiling will double to $200bn while green bonds will be issued more regularly in future.

Citizens will be able to participate through retail green bonds.

A green and sustainable finance grant scheme will be launched to provide financial support to bond issuers and borrowers to cover their expenses on bond issuance and external review services. The scheme will last for three years and the Hong Kong Monetary Authority (HKMA) will announce further details in the future.

The new plan will be taken over from a pilot grant scheme and green bond grant scheme set to expire in the middle of this year.

John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “Hong Kong’s limited geographical area and high urban density means there are limited options to decarbonise and achieve net zero by 2050. Nevertheless, much more can be done in terms of the three main areas of improving our energy mix, improving energy efficiency in our buildings, and also improving sustainability in our modes of transportation. All these areas require capital investment and Hong Kong’s traditional role as one of the leading capital raising cities in the region is well placed to bring together providers and users of capital.”

“However, we have yet to achieve uniformity in approach on green finance taxonomy across the region although there is progress not just in Hong Kong but in the Mainland and also elsewhere in the region such as Singapore. This progress together with the HKSAR government’s support for green financing as set out in the financial secretary’s 2021 budget, has the potential not just to re-energise the post Covid-19 economy of Hong Kong and the region but also to do so in a greener and more sustainable way, which would be win-win for both the economy and environment of the city and the region,” he said.

HKSAR government launched green bonds worth $2.5bn in January.

In 2020, Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group (Steering Group) launched a plan for green finance.