(Budget 2024-25) Govt to issue bonds to support infrastructure projects, including $70b retail bonds

The government will issue a number of bonds in the coming fiscal year, with HK$70 billion to be in the retail tranche. 

Financial Secretary Paul Chan said in the coming fiscal year, the government will issue HK$120 billion worth of bonds. The HK$70 billion retail bonds will include HK$50 billion Silver Bond and HK$20 billion green bonds and infrastructure bonds. 

He added that the city has ranked first in the region for seven consecutive years in terms of the volume of international bond issuance, and proposed to expand the scope of the Government Green Bond Program to cover sustainable finance projects and take forward the Infrastructure Bond Scheme to raise capital for infrastructure projects.

“We will set a borrowing ceiling of a total of HK$500 billion for these two programs to allow more flexibility in quota re allocation,” he said. “The sums borrowed will be credited to the Capital Works Reserve Fund for investment in projects which are conducive to long-term development.”

In addition, the government plans to issue bonds of about HK$95 billion to HK$135 billion per annum over the next five years to drive the development of the Northern Metropolis and other infrastructure projects.

Chan noted that the government will continue to adhere strictly to fiscal discipline and keep the debt at a prudent level.

“It is expected that the ratio of government debt to GDP will be in the range of about 9 to 13 per cent from 2024/25 to 2028/29, which is much lower than most of the other advanced economies.”

He also stressed that the proceeds from bond issuance will not be used for funding government recurrent expenditure.