Stockholm (NordSIP) – Although some remain sceptical, global stakeholders remain focused on fulfilling their responsibility to address climate change challenges. To this effect, at the start of June, the government of Singapore published a Green Bond Framework governing the issuance of green bonds by the sovereign issuer.
The Singapore 2022 Budget foresees US$35 billion of public sector green bonds to be issued by 2030 through the Monetary Authority of Singapore on behalf of the Ministry of Finance. The Green Bonds Framework is governed by the Significant Infrastructure Government Loan Act 2021 (SINGA) and details the intended use of proceeds, the evaluation and selection governance for eligible projects, and the government’s commitment to impact reporting.
“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 in this regard,” Second Minister for Finance Indranee Rajah said at the Singapore Sustainable Investing and Financing Conference 2022.
Proceeds from green bonds issued under the Framework will be used to finance eight categories of projects deemed to be aligned with the Singapore Green Plan 2030 and the UN Sustainable Development Goals (SDGs): Renewable energy, energy efficiency, green buildings, clean transportation, sustainable water and wastewater management, pollution prevention, control and the circular economy, climate change adaptation, and biodiversity conservation and sustainable management of natural resources and land use.
To qualify as nationally significant under the SINGA, infrastructure projects should be controlled and legally owned by the Government, cost at least S$4 billion, have a useful life of at least 50 years, and would support or materially improve national productivity or Singapore’s economic, environmental, or social sustainability.
Morningstar Sustainalytics, provided a Second-Party Opinion on the Framework, concluding that the Framework is credible, impactful and aligns with internationally recognised market principles and standards. DBS Bank served as adviser to the Singapore Government on the development of the Framework.
“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. We are heartened to support the Singapore Government in the structuring and development of the framework which will provide a robust foundation for Singapore to further cement its position as a global green finance hub, and drive more high-quality public and private green bond issuances to fuel the nation’s climate ambitions,” said Clifford Lee, DBS Bank’s Global Head of Fixed Income.
