Hong Kong's gateway role particularly important in green finance: monetary authority

HONG KONG - Hong Kong's gateway role is particularly important in green finance as it matches the Chinese mainland's demand with international supply of green capital, the Hong Kong Monetary Authority (HKMA) said Monday.

Hong Kong has always been the gateway between the Chinese mainland and the rest of the world, serving as the preferred location for international investment in the Chinese mainland bond market as well as for mainland issuers to raise bond financing, and the same applies when it comes to green bonds, said a report released by the HKMA at a media briefing on the green finance development in Hong Kong.

Although there are strong demands for green funding from the Chinese mainland and for green investment opportunities from international investors, green financial flow between the Chinese mainland and the rest of the world has so far been insignificant due to differences regarding infrastructure, market practice, legal and regulatory regimes, among others, the report said, stressing that Hong Kong is well-positioned to bridge the gap.

The Green Certification Scheme, developed by the Hong Kong Quality Assurance Agency (HKQAA) with reference to a number of widely recognized international and the Chinese mainland standards, leverages Hong Kong's experience in certification services and enhances the credibility in green finance, thus facilitating its further development, it said.

Hong Kong has seen at least 13 green bonds issued in the first five months of this year, with an aggregate size of $5 billion, Vincent Lee, executive director (external) of the HKMA, said at the briefing.

The issuers of these green bonds include multilateral development banks and private sectors from Hong Kong, the Chinese mainland and abroad, Lee added.

The report attributed the recent development in green bond to supportive measures by the Hong Kong Special Administrative Region government, the most recent of which include the HK$100 billion (about $12.7 billion) Government Green Bond Program.

The newly-announced government green bond program is expected to create demonstrative effect to attract the Chinese mainland and international green issuers and investors to the "Hong Kong platform", Lee said.