Singapore releases guidelines for first sovereign green bond issuance

The framework document was created under the Significant Infrastructure Government Loan Act 2021 (SINGA), which will also govern the bond issuance. The Singapore’s government will later issue its sovereign green bond under the SINGA. The sovereign green bond will be used to finance nationally significant infrastructure that meet the green criteria set out in the guidelines.

According to a statement by Singapore’s central bank, the guidelines  provide details on the Singapore’s government’s expected use of green bond proceeds, governance structure for evaluating and selecting eligible projects, how the green bond proceeds will be managed, and its commitment to post-issuance allocation and impact reporting.

Profits from the green bonds issued under the guidelines will be used to fund expenditures to support the Singapore’s green plan 2030. Eligible green expenditures include renewable energy, energy efficiency, green building, clean transportation, sustainable water and wastewater management, pollution prevention, control and circular economy and climate change adaptation, and biodiversity conservation and sustainable management of natural resources and land use.

Nicholas Hanna of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons said: “The nation’s first sovereign green bond issuance reflects its ambitions in accelerating and leading the growth of its green finance market. These public sector green bond issuances are not only a key part of Singapore’s overall sustainability agenda, but it will also build on the Monetary Authority of Singapore’s efforts to develop Singapore’s green financing market.”

“Although time will tell the market’s appetite for Singapore green bonds, the green angle is likely to attract those who are more aware of and want to act to help fight climate change. This is yet another example of Singapore acting with innovation and delivering incentives to support its endeavours as a smart nation,” he said.

The Singapore government announced that it would issue up to S$35 billion of green bonds by 2030 as part of its 2022 Budget.