Framework of the Programme
In February 2018, the Financial Secretary of the Hong Kong Government announced in his 2018-19 Budget to launch the Programme, with a borrowing ceiling of HK$100 billion (approximately US$12.8 billion), to demonstrate the commitment to promoting green finance and developing Hong Kong into a more sustainable and livable city.
The framework of the Programme sets out how the Government intends to issue green bonds with the vision to improve the environment, combat climate change and transition to a low carbon economy. The framework was first published in March 2019 and was updated in February 2022. The updated framework reflects Hong Kong’s latest climate commitments and strategy that aligns with the latest international standards and practices in the green bond market.
1. Usage, reporting and management of proceeds of green bonds
The proceeds of bond issuance will be used exclusively to finance or re-finance public works projects of the Government that fall under one or more of the eight eligible categories, namely:
- renewable energy
- energy efficiency and conservation
- pollution prevention and control
- waste management and resource recovery
- water and wastewater management
- nature conservation/biodiversity
- clean transportation
- green buildings
The proceeds will be credited to the Capital Works Reserve Fund, administered by the Financial Services and the Treasury Bureau pending earmarking to eligible projects. The Bureau provides information on the allocation of the net proceeds of the green bond issuance via annual Green Bond Reports.
2. Project evaluation and selection
The Steering Committee on the Programme chaired by the Financial Secretary and comprising the Secretary for Financial Services and the Treasury, the Secretary for the Environment and Deputy Chief Executive of the Hong Kong Monetary Authority among others is set up to oversee the implementation of the Programme.
One important duty of the Committee is to review and approve (a) each green bond issuance, (b) the allocation of proceeds of each tranche of bonds to eligible projects and (c) eligible projects which continue to meet the eligibility criteria during the life of the bond and (d) reports prepared on the Programme.