Hong Kong Unveils New Retail Green Bonds to Boost Green Finance

In a move towards promoting sustainable finance, the Hong Kong Government has announced a new batch of retail green bonds on Sept. 5, 2023.

These bonds, available exclusively for Hong Kong residents, have a denomination of HK$10,000 and a three-year tenor. Bondholders will receive biannual interest payments, with rates pegged to the city's inflation. A minimum interest rate is set at 4.75%, ensuring steady returns for investors.

Financial Secretary Paul Chan emphasized that benefits will be twofold, stating that issuance will both aid market development and amplify financial inclusiveness.

"This offers the public dependable investment avenues, enabling them to benefit from the trajectory of green finance development," he remarks.

Secretary for Financial Services & the Treasury, Christopher Hui, elaborated by explaining that the allocation of bond proceeds will be directed to the Capital Works Reserve Fund, targeting green projects with notable environmental benefits.

Some earmarked initiatives encompass drainage improvement in Tsim Sha Tsui focusing on climate change adaptation, an upgrade of the North East New Territories' sewerage system underwater and wastewater management, and the foundation of the Government Chinese Medicines Testing Institute in Tseung Kwan O, which is classified under green buildings.

The retail green bond's target issue size is HK$15 billion, however, depending on market conditions, the government may upscale the issuance to a ceiling of HK$20 billion. Hui added, "Our continued green bond issuances aim to fortify Hong Kong's green and sustainable finance ecosystem."

Residents can start subscribing from 9 AM on Sept. 18, with the window closing at 2 PM on Sept. 28. These bonds will be publicly traded from Oct. 11, following their listing on the Hong Kong Stock Exchange.

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