9 Oct 2018
Current Situation and Development Direction of Green Finance in Hong Kong
Thanks to the continuous promotion of the government, Hong Kong’s green bond market has shown remarkable performance in recent years and new developments have taken place in the green loan market.
1. Hong Kong green bond market develops rapidly
Since the beginning of this year, development of Hong Kong's green bond market has accelerated significantly. Firstly, issuance of green bonds increased significantly. Compared with issuance of US$2.3 billion in 2017, about 16 green bonds with a total of US$2.3 billion were issued in Hong Kong in the first half of this year, three times as much as last year. Secondly, the issuers tend to be diversified, including local institutions, Mainland enterprises and international organizations. Mainland enterprises are the main participants in Hong Kong’s green bond market. The proportion and scale of green bonds issued offshore by Mainland enterprises increased significantly from 18% (US$6.6 billion) in 2017 to 40% (US$5.25 billion) in the first half of this year, and the issuers shifted from large commercial banks and policy banks to leading enterprises. Thirdly, the denominated currencies are more abundant, including currencies such as Hong Kong dollar and Renminbi.
2. The government has increased its support for green finance
In January this year, the Hong Kong Quality Assurance Agency launched the Green Finance Certification Scheme with reference to a number of international and national standards, improving the recognition of green financing. In February, The Government mentioned in its 2018-19 Budget that it would launch a green bond issuance program with a borrowing ceiling of HKD 100 billion. In June, the Green Bond Grant Scheme (GBGS) was launched to subsidize qualified green bond issuers in using the Certification Scheme. In September, the Hong Kong Green Finance Association was launched, and the Securities and Futures Commission published a Strategic Framework for Green Finance to ensure the credibility of green products sold in Hong Kong and to develop diversified green investment opportunities by providing disclosure guidelines that meet international standards.
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