Singapore’s NEA issues S$1.65bn green bonds for sustainable projects

Out-Law News | 16 Sep 2021 | 8:42 am | 1 min. read

Singapore’s National Environment Agency (NEA) has raised S$1.65 billion (US$1.23bn) from its first green bond issuance, the proceeds of which will be used to fund sustainable projects.

The bonds were issued in two tranches: S$350 million (US$261m) 10-year fixed rate notes with a coupon rate of 1.67% each year; and S$1.3bn (US$968m) 30-year fixed rate notes with a coupon rate of 2.5% each year. The final order book exceeded S$2bn (US$1.5bn), and was over 21% oversubscribed. DBS Bank was the sole arranger.

The bond issuance is the longest tenor green bond denominated in Singapore dollars and the longest tenor unrated public green bond in Southeast Asia, according to an official statement.

Mark Tan of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: “Green bonds are commonly seen today as a form of market innovation designed to facilitate capital formation in projects which are envisaged to have a positive environmental impact, including but not limited to financing projects that are aimed at energy efficiency, pollution prevention, sustainable agriculture and forestry, which will hopefully help to cumulatively mitigate the long-term negative impact of climate change.”

“The issuance of such green bonds in Singapore by NEA is therefore another positive step forward in the nation’s plan to be a leading centre for green finance in the region and around the world, this being one of the key targets of the green economy pillar initiative under the Singapore Green Plan 2030,” he said.

The bond issuance is under NEA’s S$3bn (US$2bn) multicurrency medium term note programme and green bond framework established in August. The net proceeds of each green bond issue under the framework will be used for funding or refinancing eligible new or existing green projects.

The first eligible project is the Tuas Nexus integrated waste management facility, the first phase of which is due for completion by 2025. Once operational, the plant will generate electricity from waste and processes incinerable waste, household recyclables, and food waste.