Green Loan

A type of loan instrument that is used to finance or re-finance eligible green projects

Green Loan Principle
  • Internationally recognized voluntary issuance guidelines
  • Can be applied on a deal-by-deal basis
  • With 4 main components which is the same as Green Bond Principle:
    1. Use of Proceeds
    2. Process for Project Evaluation and Selection
    3. Management of Proceeds
    4. Reporting
  • Enhancement of sustainability management
  • Promoting green projects and resolve environmental issues
  • Raising funds on relatively favorable terms
Green Loan e-Assessment (launched by HKQAA)


  • Purpose: For companies to conduct green assessments to prove their loan projects have:
    1. Green nature
    2. Conducted environmental impact reporting
  • Assessment Criteria:
    1. Proceeds of the Loan are clearly defined for the use of Green Projects;
    2. Project nature can match with the Use of Proceeds of Green Loan Principles and Sustainable Development Goals;
    3. Select key indicators for environmental impact and prepare for data collection
  • Assessment Types:
    Assessment Type Initial Assessment Surveillance Assessment
    Focus If the Loan has green nature If the Loan has conducted environmental impact reporting
    Result Green Nature
    (Green or Non-Green)
    Green Type
    (AAA | AA | A | BBB | Unclassified)
Bank of China (Hong Kong) Limited & Sweetheart Garden Restaurant
Borrower: Sweetheart Garden Restaurant
Lender: Bank of China (Hong Kong) Limited
Use of Proceeds: Shop renovation – Installing energy-saving lamps and air-conditioning system
DBS Bank (Hong Kong) Limited & Xinyi Glass Holdings Limited
Borrower: Xinyi Glass Holdings Limited
Lender: DBS Bank (Hong Kong) Limited
Use of Proceeds: Investing in comprehensive green production and products
Green Bond and Green Loan Comparison
Green LoansGreen Bonds
Usually from Financial InstitutesUsually from Investor Markets
Flexible interest ratesFixed interest rates
Repay principal periodicallyRepay principal on maturity
Lenders cannot demand early repayment if loan term has not been agreedInvestors can trade their Green Bonds before maturity