Out-Law News | 17 Jun 2021 | 9:50 am |
Singapore’s president Halimah Yacob has approved the Significant Infrastructure Government Loan Act (SINGA) which will allow local government to borrow for major long-term infrastructure.
The government will be able to borrow up to S$90 billion ($68bn) to pay for infrastructure which will last at least 50 years. The annual interest limit for such borrowings cannot exceed S$5bn ($4bn), and each project funded under the law must be sizeable with a cost of at least S$4bn ($3bn).
It is reported as the first time such loans will be allowed since the framework for the protection of Singapore's reserves was established in 1991. Halimah said the new law is an "important waypoint" under the reserves protection framework and it will allow the government to allocate financial responsibility more fairly among the generations that will benefit from these projects.
Infrastructure expert James Harris of Pinsent Masons, the law firm behind Out-Law, said: “This newest legislation is a great example of the further evolution of Singapore, not only in terms of careful and measured planning for the development of significant infrastructure needs for future generations but also the associated uplift it will bring in national productivity, job creation and investment opportunities also leverages Singapore’s AAA rating allowing favourable pricing to be tapped in the global debt markets. It reminds the international markets of Singapore’s importance as a strong financial hub in Asia.”
SINGA was passed by the parliament in May.