The Government served a notice to the Legislative Council today 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.

Secretary for Financial Services & the Treasury Christopher Hui said the move would increase the capacity for financing public works projects, given that the Government will accelerate the development of the Northern Metropolis (NM) and other public works projects relating to the economy and people's livelihood.

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.

Mr Hui emphasised that issuing bonds to support infrastructure development is a common practice worldwide.

He highlighted that 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, adding that 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% to 19.9%, which is a highly prudent level and well below that of most advanced economies.

Subject to the legislative process, the Government will move the resolution in LegCo on April 1.