Publication
Bigger, Broader, Greener: Hong Kong Raises the Bar on its Green and Sustainable Finance Scheme
Publication
The Hong Kong Monetary Authority (the “HKMA”) has updated its Guideline on the Green and Sustainable Finance Grant Scheme (the “Updated Guideline”). The Green and Sustainable Finance Grant Scheme (the “GSF Grant Scheme”), which was originally launched in 2021, provides subsidies for the costs of eligible green and sustainable bond and loan issuances in Hong Kong. The guideline for the GSF Grant Scheme was previously updated in May 2024 with various enhancements, including an expanded scope to cover transition bonds and loans (the “2024 Guideline”).1
In April 2026, the HKMA announced the Updated Guideline which took effect from 24 April 2026, and applies to all formal applications submitted on or after 24 April 2026 (irrespective of when the bonds are issued).
Although the GSF Grant Scheme and the Updated Guideline apply to both eligible loans and eligible bond issuances, this debt capital markets bulletin focusses on the bond aspects.
In response to recent market developments and industry feedback, the latest refinements to the GSF Grant Scheme in the Updated Guideline are centered around three objectives: (i) incentivising larger-scale bond issuance in Hong Kong, (ii) further promoting the competitiveness of Hong Kong’s green and sustainable finance (“GSF”) ecosystem, and (iii) enhancing support for new entrants to the GSF market and emerging areas, such as transition finance.
The general structure of the GSF Grant Scheme remains unchanged from 2024, with subsidies available via two tracks:
(i) Track I: covering general bond issuance costs; and
(ii) Track II: covering sustainability external review costs and (a newly introduced) sustainability advisory costs.
We set out below the key changes in the Updated Guideline:
| 2024 Guideline | Updated Guideline | |
| Track I – General Bond Issuance Costs | ||
| Minimum issue size | HK$1.5 billion (or equivalent in foreign currency) | HK$2.5 billion (or equivalent in foreign currency)2 |
| Track II – Sustainability External Review and Advisory Service Costs | ||
| Grants per eligible issuance | 100% of eligible expenses, capped at HK$800,000 in total for all pre-issuance and post-issuance services (the “Global Cap”). In addition, the following sub-caps (the “Sub-Caps”) apply within the overall HK$800,000 cap:
| For bonds issued on or after 24 April 2026:3
|
| Eligible expenses | Transaction-related fees (pre-issuance and post-issuance) paid to recognised external reviewers only |
This new category of eligible expenses for “recognised sustainability advisors” refers to pre-issuance advisory services for developing the green and sustainable bond framework for an eligible issuance. See FAQ6 below for examples of such pre-issuance advisory services. Importantly, the external reviewer role and the sustainability advisor role must be two separate and distinct roles, and the entity responsible for providing advisory services in developing the bond framework (including transition plan) must be different from the entity conducting the external review of the bond. A service provider may apply to the HKMA to be granted a “Recognised Sustainability Advisor” status. Existing recognised external reviewers shall be granted recognised sustainability advisor status, provided they have delivered relevant sustainability advisory services. A list of recognised sustainability advisors and recognised external reviewers is available on the GSF Grant Scheme website. |
In addition to the GSF Grant Scheme, the HKMA has also established a Digital Bond Grant Scheme to encourage more financial institutions and issuers to adopt tokenisation technology in capital market transactions. Established in November 2024, the Digital Bond Grant Scheme provides subsidies to cover eligible digital bond issuance expenses incurred by an issuer in a primary issuance of digital bonds7.
1 See our Linklaters bulletin “Unlocking New Opportunities: Hong Kong Expands Green and Sustainable Finance Incentives and Launches Taxonomy for Sustainable Finance (May 2024)”
2 For new applications made under the Updated Guideline in respect of bonds issued before 24 April 2026, the minimum issue size remains HK$1.5 billion (or equivalent in foreign currency).
3 For new applications made under the Updated Guideline in respect of bonds issued before 24 April 2026, the grant amount is up to 75% of eligible expenses, subject to the Global Cap and Sub-Caps set out.
4 Not applicable for new applications made under the Updated Guideline in respect of bonds issued before 24 April 2026
5 An issuer that has not issued any green, social, sustainability and sustainability-linked bonds in Hong Kong within five years preceding the eligible issuance, where “issued” refers to the pricing date of the relevant bond issuance.
6 An issuer that has not issued any transition bonds in Hong Kong within five years preceding the eligible issuance, where “issued” refers to the pricing date of the relevant bond issuance.
7 See our Linklaters bulletin “Hong Kong promotes the development of the digital bond market with the Digital Bond Grant Scheme (November 2024)”