Govt to issue retail green bonds

September 5, 2023

Secretary for Financial Services & the Treasury Christopher Hui: 

The target (issue) size for the upcoming retail green bond issuance is $15 billion. Depending on market conditions, the Government may consider increasing this amount to a maximum of $20 billion. 

The retail green bond will have a tenor of three years and the bond holders will be paid interest once every six months at a rate linked to inflation in Hong Kong, subject to a minimum rate of 4.75%.

The subscription period (of the retail green bond) will start from September 18, which is the Monday after next, to September 28, which is the last Thursday of this month. 

The proceeds of Government green bonds will be credited to our Capital Works Reserve Fund to finance or refinance green projects with environmental benefits. 

For reference, some examples of eligible green projects include drainage improvement works in Tsim Sha Tsui under the category of climate change adaptation, North East New Territories sewerage system upgrade under the category of water and wastewater management, and the establishment of the Government Chinese Medicines Testing Institute in Tseung Kwan O under the category of green buildings.

(To watch the full press conference with sign language interpretation, click here.)

The Government today announced the launch of a new batch of retail green bonds under the Government Green Bond Programme for Hong Kong residents’ subscription, at a denomination of $10,000.

During the three-year tenor, bond holders will be paid interest once every six months at a rate linked to the city’s inflation, subject to a minimum rate of 4.75%.

Financial Secretary Paul Chan said: “The Government’s issuance of a new batch of retail green bonds will further facilitate market development and at the same time promote financial inclusiveness, offering members of the public investment options with steady returns so that they can also participate in and benefit from green finance development.”

Elaborating on the details of the bond sale at a press conference this afternoon, Secretary for Financial Services & the Treasury Christopher Hui noted: “The proceeds of Government green bonds will be credited to our Capital Works Reserve Fund to finance or refinance green projects with environmental benefits.

“Some examples of eligible green projects include drainage improvement works in Tsim Sha Tsui under the category of climate change adaptation, North East New Territories sewerage system upgrade under the category of water and wastewater management, and the establishment of the Government Chinese Medicines Testing Institute in Tseung Kwan O under the category of green buildings.”

The target issue size of the retail green bond is $15 billion. The Government may further increase the issuance size to a maximum of $20 billion having regard to market conditions.

“Through continuing to issue green bonds, we hope to enrich the green and sustainable finance ecosystem in Hong Kong, and showcase to potential issuers that Hong Kong can provide one-stop services and is the premier platform for the issuance of green and sustainable financial products,” Mr Hui added.

The subscription period will start from 9am on September 18 and end at 2pm on September 28. Hong Kong residents may apply through a placing bank, a securities broker or the Hong Kong Securities Clearing Company.

The bonds will be issued on October 10 and listed on the Hong Kong Stock Exchange the next day. They can be traded in the secondary market afterwards.