SINGAPORE: Jurisdiction Launches Green Sovereign Bond Framework.

As published on finews.asia, Thursday 9 June, 2022.

Singapore has launched a framework for green bond issuance by its public sector, with the first sovereign notes likely within months.

The city-state set up the framework for issuing public-sector green bonds under its Significant Infrastructure Government Loan Act 2021 (SINGA), the Monetary Authority of Singapore (MAS) and the Ministry of Finance (MOF) said Thursday. The framework details the government’s plans for proceeds, the structure for evaluating eligible projects and post-issuance impact reporting, the two entities said in statements on their respective websites.

"We are committed as one government to taking bold and decisive actions to tackle climate change, finance sustainable infrastructure, and catalyse the green economy. The publication of our Singapore Green Bond Framework is yet another important step forward," Indranee Rajah, second minister for finance, said in the release.

The government has previously said it planned to issue up to S$35 billion (around US$25.4 billion) of green bonds by 2030, including from statutory boards. The green bonds will be used to finance "nationally significant" infrastructure with long-term environmental benefits which meet the green criteria, the release said.

The framework is aligned with international principles and standards, and will include stringent governance on project selection and use of proceeds, the statement said. The proceeds from green bonds will be used to support the Singapore Green Plan 2030, which is aimed at transitioning the city-state to a low-carbon economy.

Eligible categories include renewable energy, energy efficiency, clean transportation, water management, and biodiversity conservation, the statement said. Examples of eligible green SINGA projects include the upcoming Cross Island Line and Jurong Region Line rail expansion, the MOF website said.

DBS Bank advised the government on developing the framework.

Clifford Lee, DBS Bank’s global head of fixed income, said the framework would boost Singapore’s position as a global green finance hub and drive more public and private green bond offerings.

"As a leading financial hub with an AAA rating, Singapore is well-placed to lead the development of the Green Bond Framework, which will serve as a good reference point to help further develop, grow and deepen ESG financing in Asia," Lee said in the release.

Two of Singapore’s statutory boards – the National Environment Agency (NEA) and the Housing & Development Board (HDB), which manages the country’s public housing projects -- have already published their own green bond frameworks. NEA’s green bond proceeds will be used for sustainable infrastructure projects, including the Tuas Nexus Integrated Waste Management Facility, a statement on the MOF website said. The proceeds from HDB’s green finance deals will be used to finance or refinance green building projects, the statement said.

The Singapore Green Plan 2030 includes a range of targets, including expanding the use of solar energy and switching to electric vehicles (EVs), setting aside more land for nature parks, and a 30-by-30 target of producing 30 percent of the island nation’s food locally.

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