Singapore’s EMA to Issue Bonds for Financing Green Transition

Singapore’s Energy Market Authority (EMA) is planning to issue green, sustainable, and transition bonds, as reported by Strait Times on January 15. The issuance is part of EMA’s SGD3bn (USD2.27bn) Multicurrency Medium Term Note (MTN) Program to finance sustainable infrastructure development projects. This would be EMA’s inaugural bond issuance, and proceeds raised from the issuance will be used to finance infrastructure and investment projects, as well as to refinance existing borrowings, among other things. The program will also allow for foreign investments and financing in foreign currencies, with an aim to tap global funds beyond the local currency.

The EMA set a target in March 2022 to reduce the carbon emissions from the power sector to net zero by 2050 without compromising Singapore’s energy security or affordability. The bond issuance, if succeeded, would allow the agency to advance its renewable energy transition while tapping private funds to augment public financing. Aside from the EMA, Singapore’s National Environment Agency and the National Water Agency (PUB) have issued green bonds in the last two years to finance integrated waste management facilities and water reclamation plants, respectively. To regulate the fast-growing green bond market, Singapore will also finalize its green taxonomy (a framework for defining environmentally sustainable investments) in 2023. Under the framework, electricity generation using low-carbon hydrogen and projects that reduce reliance on natural gas could be financed by green bonds.

Sources:

https://www.straitstimes.com/singapore/ema-to-issue-bonds-as-part-of-2b-programme-to-finance-green-energy-transition

https://www.nea.gov.sg/corporate-functions/resources/medium-term-note-programme

https://www.straitstimes.com/singapore/environment/importing-more-clean-energy-among-ways-to-help-singapores-power-sector-reach-net-zero-emissions-by-2050-report