Hong Kong doubles down to capture the green finance opportunity

Around 15 green bonds with an aggregate size of US$8b were issued in H1.

Hong Kong is steadily ramping up policy and industry efforts to encourage environmentally-friendly investments in an effort to cement its ambitions of being a leading green finance capital.

Demand for green funding is expected to surge as China shifts towards cleaner production and energy industries in its comprehensive economic blueprint and the SAR is in a good position to capture the opportunities from this transition, according to chief executive Carrie Lam.

“Hong Kong is ready to join the great green wave,” CE Lam said in a speech at the 2018 Hong Kong Green Finance Forum on September as she cited the government’s green bond issuance programme which features a borrowing ceiling of $100b and amongst the world’s largest sovereign green bond issuance programmes. 

The move is in line with steady advancements in the international green bond market where global aligned bond issuance rose 9% YoY to about US$77m in the first half of 2018.

“I'm pleased to say that we're doing a bang-up business in bonds. In the first half of this year, 15 green bonds were issued here. Their aggregate size of US$8b comes courtesy of a multitude of issuers, including multilateral agencies and private entities from around the world,” added Lam.

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The launch of the Green Bond Grant Scheme is another positive development to support this goal as the programme subsidises the cost that issuers incur in obtaining certification under the Green Finance Certification Scheme. Lam also cited enhancements to the Qualifying Debt Instrument Scheme which provides concessions for Hong Kong bond investments.

The launch of Hong Kong Green Finance Association is also another important milestone in the SAR’s development as a green finance hub.

“Rest assured, my Government will support the association and other local professional bodies in their work, including in their collaboration with overseas counterparts in the promotion of green finance,” she added.