Hong Kong plans to raise up to USD 5 billion in green bonds to promote sustainable development

The government of Hong Kong has announced plans to raise up to USD 5 billion in green bonds, with the goal of promoting sustainable development in the region. The bonds will be issued in three different currencies: US dollars, euros, and offshore Chinese yuan. The dollar tranche is expected to be spread across three, five, and ten-year bonds, with the possibility of a 30-year bond also being issued. The euro tranche will have two and seven-year tenors, and the offshore yuan tranche will have shorter two or three-year tenors, as well as a longer five-year tenor. The final size and tenors of the bond issuance may change based on investor demand. Eight investment banks are working on the dollar and euro transactions, and seven are mandated on the offshore yuan tranche.

Potential environmental impact

The issuance of green bonds can promote sustainable development by providing funding for projects that have a positive environmental impact. The proceeds from green bonds are typically used to finance projects in renewable energy, energy efficiency, sustainable transportation and other initiatives that help reduce greenhouse gas emissions and protect natural resources. By raising funds through green bonds, Hong Kong’s government can support the development of such projects and contribute to the transition to a more sustainable future. The strong demand for previous issuances of green bonds in Hong Kong points to high levels of investor interest in supporting sustainable development efforts in the region.