Hong Kong's Northern Metropolis tech hub could usher in transformation within its traditionally conservative government-related entities (GREs), S&P Global Ratings said in a Tuesday release.
The GRE sector will expand in size and number, pushing for greater debt and leverage at the same time, S&P said.
The tech hub will be Hong Kong's largest investment project to date, with a price tag of HK$360 billion, S&P said.
GREs will contribute about HK$140 billion in the hub, potentially raising debt and equity funding in capital markets to reach the amount, according to S&P.
The approach could lead to private investment and create a credit multiplier, S&P credit analyst Ricky Tsang said.
S&P expects GREs to lead several major projects as Hong Kong increases its focus on its linkages to the Greater Bay Area's tech value chains.
Hong Kong's sector support will anchor credit strength even under weaker financial performances from the GREs in the investment phase, S&P said.