New Hong Kong asset-backed security to boost investment in infrastructure

According to financial secretary Paul Chan’s 2022 budget, the Hong Kong Mortgage Corporation Limited (HKMC) will first conduct a study to implement a pilot scheme on infrastructure financing securitisation before issuing the security. The plans will make the local infrastructure financing market “more vibrant and diversified” and will help the “inflow of market capital to high‑quality infrastructure projects”, according to the budget speech.

The Hong Kong SAR administration also plans to allocate HK$5 billion (US$639m) to set up a Greater Bay Area (GBA) Investment Fund, which will focus on investment opportunities in that area.

Alvin Ho at Pinsent Masons said: “These initiatives and policies reaffirm Hong Kong SAR’s commitment to be an international financial centre for China and the world. The HK$5bn GBA Investment Fund will incentivise investment in growth companies located across the region. This is a positive step not only with respect to the government earmarking more capital directed at the technology, green finance and asset management sector, but also in promoting innovation, economic growth and jobs throughout the GBA.”

“The key issue is how quickly the funding and policies can be executed so that they are in place and ready to drive a post-pandemic recovery once the pandemic is brought under control,” he said.

On green and sustainable finance, the Hong Kong SAR administration will lower the minimum loan size for companies applying for green financing under the Green and Sustainable Finance Grant from HK$200m to HK$100m. This grant scheme was launched in 2021.

The Hong Kong SAR administration plans to launch a three-year Pilot Green and Sustainable Finance Capacity Building Support Scheme, under which it will offer subsidies to individuals for relevant professional training and qualifications.

Another training subsidy pilot scheme will be launched for financial technology (fintech) professionals.  Under this scheme, 80% tuition reimbursement will be available to around 1,500 people who have attained fintech professional qualifications.