Hong Kong Monetary Authority Announces Further Optimisation Measures for the Green and Sustainable Finance Grant Scheme

Background:

The Green and Sustainable Finance Grant Scheme (“the Scheme”) was launched in May 2021 to provide grants for eligible green and sustainable bonds and loans issued in Hong Kong. As announced in the 2024–25 Budget, the Scheme was extended for three years until 2027, with its scope expanded to cover transition bonds and loans.

Recently, further optimisations to the Scheme have been released, which will take effect on 24 April 2026. The updates reflect the latest market developments and are formulated based on industry feedback. These refinements aim to:

(i) incentivise larger-scale bond issuance in Hong Kong, (ii) further promote the competitiveness of Hong Kong’s GSF ecosystem, and (iii) enhance support for new entrants to the GSF market and emerging areas, such as transition finance

Details are as follows:

Source: Hong Kong Monetary Authority (HKMA) Scheme

Impact on Parties:

Issuers:

§   Significant reduction in transition financing costs for high‑carbon industries through dual subsidies covering issuance expenses and review fees.

§   Enterprises that have already issued green bonds remain eligible for first‑time transition bond subsidies.

§   Direct compliance by reference to the Hong Kong Sustainable Finance Taxonomy (Phase 2A) (HK Taxonomy) without additional certification.

External Review Providers / Consultants：

§   Explosive growth in demand for transition plan advisory and certification services, as well as taxonomy alignment support.

§   Business expansion for institutions recognized by the HKMA.

Summary of Key Elements of the Scheme

Source: Lianhe Green, HKMA Scheme

Impact of the Scheme Update

The HKMA’s extension of the Scheme to 2027, together with the expansion of its coverage to transition bonds and loans and pre-issuance advisory expenses, represents a key measure to strengthen Hong Kong’s position as a green finance hub in Asia.

1.     It institutionalises the subsidy mechanism first introduced in 2021 on a longer-term basis, stabilising expectations among issuers, financial institutions and investors, and continuously lowering compliance and review costs for green and sustainable debt issuances. By extending support from pure green projects to transition financing for high-carbon industries, the scheme aligns with the global trend of “just transition” and supports sectors such as steel, cement and energy in achieving decarbonisation pathways through financial means.

2.     The updated scheme establishes the HK Taxonomy as the core compliance benchmark, marking Hong Kong’s strategic upgrade from following international standards to a model of “standard-setting, local customisation and international mutual recognition”. Only green and transition projects aligned with the Hong Kong Taxonomy are eligible for subsidies, using fiscal incentives to guide issuers, banks and corporates to prioritise the Hong Kong standard, thereby rapidly increasing its adoption across bonds, loans and investment portfolios.

This update leverages subsidies as a policy tool and takes the HK Taxonomy as its core, achieving a multi-pronged strategy of reducing financing costs, establishing Hong Kong’s standard as a regional leader, and strengthening its status as an international financial centre.