The West Kowloon Cultural District Authority (WKCDA) announced the signing of its inaugural HK$4 billion Sustainability-linked Loan (SLL), the first of its kind amongst statutory bodies and arts and cultural institutions in Hong Kong, reaffirming the Authority’s commitment to fulfilling its mission and core values through its sustainability framework.

The three-year committed SLL, comprising term and revolving credit facility, is led by HSBC and Standard Chartered as the Global Coordinators and Sustainability Structuring Banks. The loan syndicate comprises a total of 9 banks from diverse geographies, and the SLL was significantly oversubscribed which well exceeded the Authority’s required loan amount of HK$4 billion, signifying the banking community’s full confidence in the Authority’s development prospects and capability in fulfilling its missions.

Under the SLL, the Authority will receive a tiered discount rate on the interest margin throughout the loan tenure of three years if it achieves certain pre-agreed ESG targets, including achieving green building certification, offering accessibility services to persons with disability or underprivileged groups, and providing arts and cultural learning programmes to youth.

“We are delighted with the overwhelming response of the banking community to our first SLL,” said Mr Henry Tang, Chairman of the Board of WKCDA. “West Kowloon Cultural District (the District) is designed to be an urban oasis that brings people closer to nature and culture. The SLL aligns with the Authority’s sustainability and accessibility principles which are embedded in the planning and operations of the District. It also marks an important milestone in the District’s development towards sustainable financing and demonstrates our full commitment to green and accessibility.”

Luanne Lim, Chief Executive, Hong Kong at HSBC said: “HSBC is delighted to have partnered with the Authority on its inaugural SLL, which marks an important benchmark for the arts and cultural sector. As the first statutory body in Hong Kong to align its financing strategy with sustainability commitment in a SLL format, the Authority has set out ambitious and comprehensive targets covering environmental and social impacts, contributing to the development of Hong Kong’s position as Asia’s green finance hub.”

Ms Mary Huen, CEO, Hong Kong, Standard Chartered, said, “Standard Chartered is pleased to contribute to the WKCDA’s first SLL, together promoting the long-term arts and cultural development of Hong Kong based on sustainability principles. The SLL marks another major achievement in Hong Kong’s sustainable debt market, which rapidly rose to USD20.6 billion in 2021. We expect more local corporates and institutions to look for sustainable financing as Hong Kong targets to achieve net zero carbon emissions by 2050.”

The SLL facility is provided by the following banks and financial institutions:

Global Coordinators and Sustainability Structuring Banks
The Hongkong and Shanghai Banking Corporation Limited
Standard Chartered Bank (Hong Kong) Limited

Mandated Lead Arrangers and Bookrunners
Bank of Communications (Hong Kong) Limited
Hang Seng Bank Limited
The Hongkong and Shanghai Banking Corporation Limited
Industrial and Commercial Bank of China (Asia) Limited
Mizuho Bank, Ltd.
Standard Chartered Bank (Hong Kong) Limited
Sumitomo Mitsui Banking Corporation

Mandated Lead Arrangers
Bank of China (Hong Kong) Limited
China Construction Bank (Asia) Corporation Limited

Sustainability Reporting Liaison Bank and Facility Agent
Sumitomo Mitsui Banking Corporation

The proceeds of the loan will be used to meet the Authority’s general corporate funding requirements and refinance existing indebtedness to support the District’s development. The WKCDA will continue to unleash the potential of its commercial development portfolio, leveraging the District’s unique geographical location and synergy with the arts and cultural facilities.

Remarks

About the West Kowloon Cultural District
The West Kowloon Cultural District is one of the largest and most ambitious cultural projects in the world. Its vision is to create a vibrant new cultural quarter for Hong Kong on forty hectares of reclaimed land located alongside Victoria Harbour. With a varied mix of theatres, performance spaces, and museums, the West Kowloon Cultural District will produce and host world-class exhibitions, performances, and cultural events, providing twenty-three hectares of public open space, including a two-kilometre waterfront promenade.