Hong Kong to raise capital for infra expansion

Capital works expenditure will increase to about $120b annually from the previously estimated $90b.

Financial Secretary Paul Chan announced that the Hong Kong Government will raise capital through bond issuance to ensure that critical infrastructure projects proceed on schedule.

Delivering the 2025-26 Budget, Mr. Chan revealed that capital works expenditure will increase from the previously estimated $90b to about $120b annually.

To support this rise, the government will leverage market resources through public-private partnerships, land exchanges, and large-scale land disposals. Additionally, government bonds will be issued to provide stable funding for infrastructure expansion.

Over the next five years, from 2025-26 to 2029-30, the government will issue $150b to $195b worth of bonds annually under the Government Sustainable Bond Programme and the Infrastructure Bond Programme.

Of these funds, 56% will be used to refinance short-term debts, ensuring the government maintains liquidity while continuing investment in large-scale projects.

To accommodate this financing strategy, the borrowing ceiling for these bond programmes will increase from $500b to $700b under the Medium Range Forecast.

Despite this rise, Mr. Chan reassured that Hong Kong’s government debt-to-GDP ratio will remain between 12% and 16.5%, which is well below the levels of most advanced economies.

He emphasised that the bond proceeds will be used strictly for infrastructure investments, such as transportation, housing, and public facilities, rather than for recurrent government expenditure.