Hong Kong can become green bond financing hub for Greater Bay Area, monetary authority says
- Green bonds issued in Hong Kong reached US$26 billion by end of 2019, of which 70 per cent were issued by Chinese entities
- City can become a green bond financing hub particularly for Greater Bay Area, Edmond Lau says
The cumulative amount of green bonds – fixed-income products designed to fund projects that are environmentally friendly – issued in Hong Kong reached US$26 billion by the end of 2019, according to a report on the city’s green bond market by Hong Kong Institute for Monetary and Financial Research (HKIMR) released on Tuesday.
Mainland Chinese entities accounted for more than 70 per cent of issuances by the end of last year, while financial institutions accounted for around half of the green bonds issued last year.
The report presented the findings of a survey conducted by HKIMR in collaboration with accounting firm Ernst & Young among 48 green bond issuers and investors, including financial institutions, governments and multilateral development banks.
The report also laid out strategies for accelerating the development of Hong Kong as an international green bond hub, including increasing public awareness to increase their investor base and easing cross-border green bond issuances.
Mainland Chinese companies needed to go through complicated procedures to get funding from overseas investors for green development projects, said Lau, who is also the deputy chairman of HKIMR. Collaboration between China and Hong Kong on a passageway for easing green bond issuances by mainland Chinese companies will help speed up the process, he said.