Airport Authority

SCA 2018 Project Owner (Public Sector) - Merit Award

Practices

The Airport Authority Hong Kong (AA) recently completed the installation of two aviation fuel pipelines connecting the Aviation Fuel Receiving Facility (AFRF) at Sha Chau with Hong Kong International Airport (HKIA), one of the milestone achievements for the Three-runway System (3RS) project. Unlike traditional open trench construction methods which greatly increase the risk of adverse impact to the environment, the Horizontal Directional Drilling (HDD) technique is an environmentally friendly, sustainable construction technique that involved no dredging of seabed and avoided any disturbance to the marine environment. The new pipelines installed are approximately 5.2km long, making them the world’s longest pipelines installed using the HDD method.

Following the 3RS environmentally friendly design and construction principles, HDD, a non-dredged method, was adopted to install two new aviation fuel pipelines in the rock stratum at 100m below seabed to replace the existing fuel pipelines which are directly under the seabed of reclamation footprint of the 3RS project. The HDD method avoided disturbance to the marine environment.

As the works area is in the vicinity of Sha Chau and Lung Kwu Chau Marine Park, as well as the egretry on Sha Chau, the AA has requested its contractor to adopt a series of environmental protection measures. For example, construction works on Sha Chau were suspended during the Ardeids’ breeding season from April to July.

About the Model

The HKSAR Chief Executive had announced in the 2017 Policy Address to position Hong Kong as an Asia’s green finance hub for raising green capital. In view of the substantial GDP contributed by the construction sector annually, the construction industry has a high potential to meet the trend of green finance. Thus, there is a need to well define the green standard and system to facilitate the application of green finance in construction industry.

The Model aims to act as an interactive guide on environmental practices and advanced technologies for construction projects which is compatible with international green bond/loan principle. Green finance can mobilise capital for green and low carbon investments in the construction industry. Public owners, developers, contractors and suppliers could issue green financial instruments for funding their projects with reference to the guideline of this model.

Interactive guide to classify construction practices based on green finance principle

Interactive guide to classify construction practices based on green finance principles

User-friendly model for set up its own checklist and sustainability KPIs

User-friendly model for set up its own checklist and sustainability KPIs

Sustainable hub to share latest local and intentional solutions

Sustainable hub to share latest local and international solutions

Why the Industry Needs Green Finance?

  • Green finance providing benefits for assisting the transition from the ‘brown’ to the ‘green’ construction.
  • Green finance can mobilise capital for green and low carbon investments in the construction industry
  • Stakeholders can seek opportunities for long pay back initiatives and low interest rates when adopting advanced and innovative measures.
  • To encourage investors from the Mainland along the Belt and Road as well as international investors to arrange green financing through Hong Kong construction capital markets.

Components of Green Bond/Loan Principles

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Green bond/ loan proceeds are to be applied for environmental (or “green”) projects with an indicative list of eligible project categories. See the figure below for the 10 eligible Green Project Categories.

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Recommends issuers/ borrowers to disclose their overall green objectives, the process used to determine eligibility of green projects, and the process to manage environmental and social risks of these projects.

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The net proceeds of the Green Bond/ Loan, or an amount equal to these net proceeds, should be credited to a sub-account, moved to a sub-portfolio or otherwise tracked by the issuer/ borrower in an appropriate manner, and attested to by the issuer/ borrower in a formal internal process linked to the issuer’s/ borrower’s lending and investment operations for green projects.

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Recommends annual reporting of the amounts allocated and results of the eligible green projects.

Green Project Categories

Key Features

no. of sustainability measures compatible with international green bond and green loan principle
41
no. of sustainability measures compatible with international green bond and green loan principles
no. of stakeholders and green finance experts engaged
162
no. of stakeholders and green finance experts engaged
no. of pilot projects
30
no. of pilot projects

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