Hong Kong can seize opportunity from green finance gap: HKMA

Hong Kong is well-positioned to capitalize on a massive funding gap in the global green and sustainable loan market, due to its regulatory framework and vow to develop the local bond market, the Hong Kong Monetary Authority said.

While China has established the world's largest green loan market, valued at US$6 trillion (HK$46.8 trillion), a financing shortfall of over US$200 billion remains in the global green and sustainable sector. 

Kenneth Hui Wai-chi, an executive director of the external department at the HKMA, said that Hong Kong's robust regulatory framework helps prevent "greenwashing" and can direct capital to bridge this gap. He highlighted the roadmap to develop fixed income and currency markets, co-established by the HKMA and the Securities and Futures Commission, as a key initiative to accelerate the growth of the local bond market.

Citing a recent example, Hui noted that the HKMA assisted the government in issuing HK$27 billion in institutional green and infrastructure bonds in June, whose international tranche being nearly nine times oversubscribed. 

This response signals growing interest from global investors in diversifying their portfolios with bonds from Asia and the Hong Kong government, Hui said.