Financial Secretary Paul Chan Mo-po addresses the Global Investor Conference of People’s Government of the Hainan Province of the People’s Republic of China on Sept 12, 2023. (CALVIN NG / CHINA DAILY)
Hainan province intends to sell a second batch of green bonds in the Hong Kong Special Administrative Region, marking the debut of a biodiversity-focused dim sum bond issued by a provincial-level government.
The Hainan government and the Hong Kong Monetary Authority jointly held an investor roadshow for the sale of dim sum bonds, also known as offshore renminbi bonds. The pricing of the bonds is expected to take place today.
China’s southernmost province plans to offer bonds worth at most 5 billion yuan ($686 million), following last year’s successful blue and sustainable bond issuance that raised a total of 5 billion yuan.
The offering comprised three batches, one a three-year green bond focusing on biodiversity. The others were a two-year bond for environment and social sustainability, and a five-year bond labeled “blue” for ocean-related projects.
Hainan is the first Chinese local government that plans to test the waters for the first-ever biodiversity-themed green bonds.
The allocated funds will be directed toward various environmental protection projects, including habitat preservation, ecological restoration, and the improvement of living conditions for avian and aquatic species.
The government is expected to disclose the allocation of funds raised and pertinent information on environmental and socioeconomic aspects, as mandated by market requirements, through reports on its official website.
Hong Kong Financial Secretary Paul Chan Mo-po said that the bond sale by the Hainan government “expands the coverage of bond offerings, enabling more green projects within the province to access funding. Besides, it contributes to the expansion and deepening of Hong Kong’s green and sustainable bond ecosystem”.
The sale also helps to “bolster the city’s leading position as a global offshore renminbi hub while also supporting the progress of the internationalization of the Chinese currency”, Chan added.
The finance chief said dim sum bond issuances in Hong Kong last year amounted to 330 billion yuan, representing a tenfold increase compared with 2010.
The combined value of green and sustainable debt issuances in Hong Kong hit a record high of $80.5 billion last year, representing a substantial 35 percent share of the overall Asian market, Chan said.
The special administrative region government launched its first tokenized green bond in February.
The central government aims to peak the country’s carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.
Darryl Chan Wai-man, the Hong Kong Monetary Authority’s deputy chief executive, said the offshore bond to be issued by Hainan is set to enhance the diversity of offshore renminbi bonds and facilitate the development of the renminbi bond yield curve in Hong Kong.
The country unveiled a plan in 2018 to develop Hainan into a free trade port, achieving independent customs operations by 2025.
The province posted 681.8 billion yuan in GDP in 2022, growing an average of 5.3 percent annually over the previous five years.
