Green Finance Symposium David Pang Treasurer MTR Corporation

Green Finance Symposium David Pang Treasurer MTR Corporation Limited 4 July 2017 MTR Corporation Limited Page 1

MTR is “Green” • Metro system is a sustainable method of transporting the world’s growing urban population • One MTR train carry the same number of passengers as 25 buses or 1, 500 cars • Avoidance of environmental impacts associated with other forms of transport • Better roadside air quality • Less congestion • More efficient use of limited land resources MTR Corporation Limited Page 2

Why did we issue Green Bonds? • The green nature of our industry Ø Demonstrate MTR’s sustainability approach Ø Support MTR’s sustainability commitments • Demand from a growing green investor base • Integrate environmental, social and corporate governance into the financing and decision making process • Support developing Hong Kong into a green finance hub MTR Corporation Limited Page 3

Our Green Finance Experience Green Bond Framework 2016 14 Oct Second Opinion on Green Bond Framework 2016 14 Oct Issuance of USD 600 M 10 -year Green bond 2 Nov 2016 Sustainability Report (Green Bond Report) 9 May 2017 Issuance of AUD 115 M 10 -year Green MTN 28 Jun 2017 MTR Corporation Limited Page 4

MTR Green Bond Framework • Aligned with the Green Bond Principles of the International Capital Market Association • Proceeds of MTR Green Bonds will be used to fund or refinance, in whole or in part, Eligible Investments • Eligible Investments include projects in the following sectors: Ø Ø Ø Ø Low Carbon Transportation Energy Efficiency Sustainable Transit Stations and Real Estate Properties Adaptation to Climate Change Biodiversity and Conservation Water Management Waste Management Pollution Prevention • Proceeds of MTR Green Bonds may be used to repay borrowings under MTR’s general credit facilities pending allocation to Eligible Investments MTR Corporation Limited Page 5

Process for identification and determination of eligibility of use of proceeds Request from project team Review of eligibility Review Criteria Approval MTR Corporation Limited Page 6

Key Terms of the US$600 M 10 -year Green Bond Issuer MTR Corporation (C. I. ) Limited Guarantor MTR Corporation Limited Nominal Principal Amount US$600 million Issue Price 99. 675% Net Proceeds US$598. 05 million Pricing Date 24 October 2016 Issue Date 2 November 2016 Maturity Date ISIN Code 2 November 2026 2. 50% per annum payable semi-annually in arrears XS 1509084775 Listing Hong Kong Stock Exchange Coupon MTR Corporation Limited Page 7

Allocation & Distribution Statistics MTR Corporation Limited Page 8

Green Bond Indices • MTR’s first green bond has been included in the following green bond indices: o Barclays MSCI Green Bond Index o Bof. A Merrill Lynch Green Bond Index o Solactive Green Bond Index o S&P Green Bond Index MTR Corporation Limited Page 9

10 -year US$600 M Green Bond – Use of Proceeds Investment Amount Allocated Category Kwun Tong Line Extension US$167. 74 million Low Carbon Transportation South Island Line (East) US$430. 31 million Low Carbon Transportation Energy Efficiency Total US$598. 05 million • SIL(E) extends our network service to all 18 districts in HK • These projects form a significant part of Rail Gen 2. 0, which also includes replacement of signalling systems and chillers, installation of LED lighting, photo sensor lighting controls, train platform doors etc. • Estimated environmental benefits from the two new lines: Ø 38, 000 tons of CO 2 emission avoided per year, equivalent to the amount of CO 2 removed by 1. 6 million trees Ø 630, 000 k. Wh of electricity saved per year with the regenerative braking and trackside energy storage system, the amount of electricity consumed by 140 families each year MTR Corporation Limited Page 10

Comparison with a Conventional Bond Issuance • An extra 6 weeks to prepare the Green Bond Framework and obtain a second opinion (with the help of an experienced Sustainability team) • Additional cost for the second opinion and assurance work for the Green Bond Report • Roadshow in Singapore, Frankfurt, Amsterdam, Paris and London to meet with green investors • Order book in excess of US$1. 4 billion, allowing the deal to be upsized to US$600 million from US$500 million initially launched • Priced at 2. 537% p. a. , 80 basis points over the benchmark 10 -year US Treasury yield – no significant pricing difference from a conventional bond MTR Corporation Limited Page 11

10 -year AUD 115 M Green MTN • Swift execution for a private placement • First-ever Asian offshore green MTN issuance in a private placement format • Met the strong demand for “green” products in the Asia Pacific investor space, particularly Australian investors • Around 63% of the issue was allocated to Green-related investors • Favourable cross currency swap rates allowed us to obtain HKD fixed rate funding at an attractive cost MTR Corporation Limited Page 12

Benefits of the Green Bond/MTN Issuance • Expanded bond investor base • Helped develop Hong Kong into a green finance hub • Enhanced the environmental-conscious culture • Enhanced our corporate image • In the long-term, improve our business sustainability MTR Corporation Limited Page 13