Singapore to Finance Infrastructure with Green Bonds

The issuance will help deepen market liquidity for green bonds, and attract green issuers, capital and investors to Singapore.

Singapore’s Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16) announced the Budget 2021, including a plan to issue green bonds on select public infrastructure projects.

“Sustainability efforts require capital. Green finance will be an important enabler,” Minister Heng said. “As an international financial centre, Singapore can catalyse the flow of capital towards sustainable development, not just in Singapore, but in Asia.”

Heng noted that MAS (Monetary Authority of Singapore) has been driving efforts to develop green finance solutions and markets for a sustainable economy, through the Green Finance Action Plan, first announced in November 2019.

In October, MAS said some of its next steps in the Action Plan are to incorporate climate-related scenarios in its annual stress tests for the financial industry, develop a roadmap to better integrate environmental risks across all its business functions, and appoint asset managers to manage its Green Investments Programme.

“The issuance of green bonds by the government will build on these efforts by deepening market liquidity for green bonds, attracting green issuers, capital, and investors, and anchoring Singapore as a green finance hub,” Heng said.

The government has so far identified up to SGD 19 billion (USD 14.3 billion) of public sector green projects that will be funded by green bond issuance, including a project to integrate waste and water treatment facilities and maximise energy and resource recovery in the solid waste and used water treatment processes.

As part of the Singapore Green Plan 2030 unveiled last week, the government will be committing to more ambitious national sustainability goals, Heng said. The government will invest SGD 60 million to support technology adoption in the food sector and improve Singapore’s food resilience, as well as actively encourage the adoption of electric vehicles, among other measures aimed at advancing the national agenda on sustainable development.

The Budget announcement also includes a SGD 900 million household support package to help families with expenses, along with initiatives to help workers and businesses weather the Covid-19 crisis. An extension of the Jobs Support Scheme (JSS) will cost the government SGD 700 million.

Read the full Budget statement here.

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