With the world facing a US$4 trillion green investment gap a year, transition finance will grow in importance because of regulatory support in Asia, experts say.

More than 200 greentech companies currently operate in the city, of which some are equipped with ‘globally competitive’ technologies and are making inroads into the mainland Chinese and overseas markets.

Finance chief also issues rejoinder after predecessor slams bond issuance proposal in new budget, says past administration failed to boost land supply at the time.

Finance chief shared in Wednesday’s budget address plans to issue HK$120 billion in silver, green and infrastructure bonds for financial year 2024-25.

Government anticipates strategy will help achieve budget surplus for 2025-26 financial year, with authorities to issue silver, green and infrastructure bonds over next five years.

‘It’s not just about addressing a global issue that might affect everybody, it’s also about protecting our people in our own land,’ Eddie Yue says.

The volume of bonds issued to finance sustainable ocean-friendly economic activity has grown across the world, but the bankability and credibility of marine preservation projects funded by these financial instruments have posed challenges to their adoption, the Climate Business Forum hears.

Hong Kong has logged a deficit almost every financial year since 2019-20, with the shortfall ballooning to HK$101.6 billion in 2023-24.

Such guidance will make it ‘a lot easier for banks to figure out what to do and what not to do’, expert says at Climate Business Forum, although profusion of guidance may cause confusion in the short term.

Companies should focus on increasing their integration with multiple sectors to enhance their ability to serve the real economy, industry experts said at a summit.

The Hong Kong Monetary Authority is expanding its role as a banking supervisor by addressing the pain points faced by the industry when managing climate risk, including setting up an online risk assessment platform and training the workforce.

‘Hong Kong has three strengths that are indispensable for fostering climate financing: technical, legal and financial knowledge,’ says Riccardo Puliti, IFC regional vice-president.

China lacks both an adequate supply and a pipeline of finance professionals with expertise in environmental, social and governance issues, organisation says.

Liu Pak-wai, an economics professor and former government adviser, says city’s 6 per cent debt-to-GDP ratio could easily go up to 10 per cent without problems.

China’s offshore green bond market stumbled last year, with issuance hitting a record low amid rising US interest rates and an absence of Chinese property developers.

Hong Kong will play host to a green and sustainable finance training event in June for several hundred policymakers, regulators and finance professionals in dozens of developing nations.

The 4.25 per cent, 2.5-year bonds were oversubscribed more than three times, totalling HK$15.69 billion (US$2 billion) from 175,178 applications.

Proof-of-concept subsidy scheme to launch in first half of year to provide early-stage funding for pre-commercial companies focusing on the collection and analysis of sustainability data.

Market players are calling on the city to keep its subsidies on green and sustainable financing beyond its May 2024 shelf life, after Singapore last year extended a similar scheme by five years.

Public-private collaboration to fund start-ups, attract and nurture talent pool can help city achieve green tech, finance hub goal, FinTech Association of Hong Kong’s Sandeep Sethi says.

The companies are among 320 organisations worldwide that are supporting a global initiative to reverse nature degradation caused by human activity and climate change.

Investing in firms and industries to help fund their transition to a low-carbon future is set to become a major theme in 2024, as demand for sustainable finance products in China and the Asia-Pacific region will remain robust despite elevated interest rates, fund managers and analysts said.

Hong Kong sees yuan trading, talent development and green finance as three potential areas of cooperation to boost its ties with Vietnam and Laos, top treasury official Christopher Hui says in a blog post.

Hong Kong is gearing up to host the 17th Asian Financial Forum 2024, the first major international financial and business event of the year, aimed at highlighting the city’s significance as an international financial centre.

Businesses in Asia-Pacific are not moving fast enough on climate action. In fact, they are slowing down, according to a study by accounting and consulting firm EY.

Multilateral development banks are looking to scale up their climate-related financing and are also trying to mobilise the private sector in this endeavour, AIIB vice-president Danny Alexander says.