The Government of Singapore will launch its first green bond offering this week, kicking off a S$35 billion (US$25 billion) multi-year green bond program with an inaugural issuance of at least S$1.5 billion, according to a statement from central bank and financial regulator the Monetary Authority of Singapore (MAS).
Proceeds from the offering will be used to support the country’s recently launched sustainable transition strategy, the Singapore Green Plan 2030, with MAS highlighting projects to expand the country’s electric rail network in support of the plan’s goal to increase mass transit share.
Singapore has committed to reaching peak emissions around 2030, and has recently announced an acceleration of its ambition to reach net zero emissions by around mid-century, from its prior commitment of halving emissions by 2050 and achieving net zero “as soon as viable in the second half of the century.”
The launch of the offering follows the publication in June of the government’s Green Bond Framework outlining eligible categories for investment from green bond proceeds, which include renewable energy, energy efficiency, green building, clean transportation, sustainable water and wastewater management, pollution prevention, control and circular economy, climate change adaptation, and biodiversity conservation and sustainable management of natural resources and land use.
The government has stated that it is aiming to issue up to S$35 billion of sovereign and public sector green bonds by 2030.
Singapore’s inaugural green bond will be issued under the Significant Infrastructure Government Loan Act 2021 (SINGA). In addition to meeting the green category criteria outlined in the green bond framework, projects will also need to be classified as nationally significant infrastructure under SINGA. MAS said that investments from the offering proceeds will include expenditures on the Jurong Region Line and the Cross Island Line rail lines, supporting the Green Plan goal of achieving 75% mass public transit modal share.
With the new offering, Singapore is introducing syndication as a new method for issuing SGS (Singapore Government Securities), appointing a group of banks to act as bookrunners to jointly market and distribute the bond. Bookrunners on the deal include DBS Bank, Deutsche Bank, HSBC, OCBC, and Standard Chartered Bank.
The bonds will be denominated in Singapore Dollars with a tenor of either 30 or 50 years. S$1.5 billion is roughly the minimum required size for benchmark inclusion.