Government to introduce resolution to raise borrowing ceiling to $900 billion for Infrastructure Bond Programme and Government Sustainable Bond Programme
The Government served a notice to the Legislative Council (LegCo) today (March 11) to introduce a resolution under the Loans Ordinance to raise the borrowing ceiling from $500 billion to $900 billion for the Infrastructure Bond Programme (IBP) and the Government Sustainable Bond Programme (GSBP) under the Capital Works Reserve Fund.
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "As the Government will accelerate the development of the Northern Metropolis (NM) and other public works projects relating to the economy and people's livelihood, we need to raise the borrowing ceiling to $900 billion to increase our capacity to finance public works projects. The Government's capital works expenditure for 2025-26 is estimated to be about $125 billion. The 2025 Policy Address announced that the Government would earmark an additional $30 billion in the next two to three years to increase expenditure on public works projects to drive sustained economic development and support the local construction industry. The capital works expenditure is estimated to be about $128 billion for 2026-27 and will remain at a similar level from 2027-28 to 2030-31.
"Issuing government bonds is one of the public financial management tools. Issuing bonds to support infrastructure development is a common practice worldwide. As public works projects are long-term investments, in particular those in the NM, there is a need for the Government to issue more longer-term bonds to align more closely the cash flow duration with project requirements. A higher borrowing ceiling and a larger mix of longer-term bonds will bring in more net proceeds. The Government plans to issue about $160 billion to $220 billion worth of bonds per annum from 2026-27 to 2030-31, and the corresponding ratio of government debt to Gross Domestic Product will rise from 14.4 per cent to 19.9 per cent, which is a highly prudent level and well below that of most advanced economies. We hope that the new borrowing ceiling can be effected as soon as possible," Mr Hui emphasised.
The GSBP (previously known as the Government Green Bond Programme (GGBP)) was established in 2018 to promote market development and to further consolidate Hong Kong's position as a green finance hub. The IBP was established in 2024 to enable better management of the cashflow needs of major infrastructure projects and facilitate their early completion. Along with the establishment of the IBP, the GGBP, renamed as the GSBP, was expanded to cover sustainable projects, and the total borrowing ceiling for the two programmes was raised from $200 billion to $500 billion, pursuant to a resolution passed by LegCo in May 2024. The 2026-27 Budget further announced raising the borrowing ceiling to a total of $900 billion for these two programmes to increase the capacity to finance public works projects. The two programmes are overseen by a steering committee chaired by the Financial Secretary.
Subject to the legislative process, the Government will move the resolution in LegCo on April 1.
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, Photo source: reference image
