Blog

A new era of financial services

A gist of the blog:

Green finance has been developing quickly in recent years amid the growing concern around the world about environmental protection and climate change. We need to recognise the importance of green finance. The Organisation for Economic Co-operation and Development (OECD) estimated that during the period from 2016 to 2030, the annual investment needed for green infrastructure worldwide will be as high as nearly US$7 trillion.

To promote the development of green finance in Hong Kong, I announced in the Budget that we will launch a Government Green Bond Programme with a borrowing ceiling of HK$100 billion. The proceeds of issuances under the Programme will be credited to the Capital Works Reserve Fund for funding green public works projects meeting specific criteria. We expect to issue the first batch of government green bond in this financial year.

On the other hand, the Hong Kong Quality Assurance Agency established at the beginning of this year a Green Finance Certification Scheme (GFCS) to provide third-party conformity assessments for issuers on their green financial instruments. To attract more corporate green bond issuance in Hong Kong, I also announced in the Budget the implementation of the Green Bond Grant Scheme. Under the Scheme, we propose providing a grant to offset 100% of the cost incurred by issuers issuing green bond at a minimum size of HK$500 million for obtaining an external review under GFCS, with a grant ceiling of HK$800,000 per issuance.

To further enhance the competitiveness of Hong Kong’s bond market, I have also rolled out a host of measures in the Budget. These include a Pilot Bond Grant Scheme to attract local, Mainland and overseas enterprises to issue bonds in Hong Kong, and proposed amendments of tax arrangements to offer tax concessions to bond investors.

April 29, 2018