Financing is critical to propel sustainable investments and projects. The Monetary Authority of Singapore ("MAS") has developed the Green Finance Action Plan to promote financing for sustainable development.
In the coming months, MAS (on behalf of the Singapore Government) will be issuing the first sovereign green bond under the Significant Infrastructure Government Loan Act 2021 ("SINGA"). Ahead of this, the Singapore Ministry of Finance published the Singapore Green Bond Framework ("Framework") on 9 June 2022 that sets out a regulatory and governance framework for green bond issuances under SINGA.
Green bonds issued under the Framework should conform with the following four core components:
- How proceeds are used. Proceeds from Singapore sovereign green bonds will be used to finance specified eligible expenditures ("Eligible Green Expenditures") that are set out in eight categories: (i) Renewable Energy; (ii) Energy Efficiency; (iii) Green Buildings; (iv) Clean Transportation; (v) Sustainable Water and Wastewater Management; (vi) Pollution Prevention, Control and Circular Economy; (vii) Climate Change Adaptation; and (viii) Biodiversity Conservation and Sustainable Management of Natural Resources and Land Use.
- How projects are evaluated and selected. The Green Bond Steering Committee ("GBSC") has the overall responsibility for overseeing and approving key decisions related to the green bonds issued under the Framework. (c)How proceeds will be managed. The Singapore Government will apply the net proceeds from the green bonds to projects approved by GBSC.
- How proceeds will be managed. The Singapore Government will apply the net proceeds from the green bonds to projects approved by GBSC.
- Post-issuance allocation reporting and impact reporting. To ensure transparency, accountability and to keep investors and stakeholders informed, the Singapore Government intends to report on how the proceeds from green bond issuances are allocated and the associated environmental benefits and social co-benefits (where possible) of the Eligible Green Expenditures.
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