Singapore introduces framework for sovereign green bonds ahead of inaugural issuance
Singapore on Thursday (Jun 9) published the governance framework for sovereign green bonds, ahead of the first such issuance expected in the next few months.
This comes as Singapore moves to develop the green finance market and make green finance a driving force for sustainability.
The Singapore Green Bond Framework sets out guidelines for public sector green bond issuances under the Significant Infrastructure Government Loan Act 2021 (SINGA), said the Ministry of Finance (MOF) and the Monetary Authority of Singapore (MAS) in a media release.
It covers the Government’s intended use of green bond proceeds, governance structure to evaluate and select eligible projects, operational approach to manage green bond proceeds, and commitment to post-issuance allocation and impact reporting.
In addition to providing the foundation for green bonds issued by the Government, the framework will also serve as a reference for statutory boards that issue their own green bonds.
The key principles considered in the development of the framework were alignment with internationally recognised market principles and standards; stringent governance and oversight of project selection and allocation of proceeds; and technical screening to evaluate and identify green projects, MOF and MAS said.
At Budget 2022, Finance Minister Lawrence Wong announced that the Government would issue S$35 billion of green bonds by 2030 to fund public sector green infrastructure projects.
Proceeds from these bonds, which will be issued under the new framework, will be used to finance costs associated with the Singapore Green Plan 2030, MOF and MAS said.
In turn, the eligible green projects are expected to facilitate the transition to a low-carbon economy in Singapore and contribute to the climate-related and environmental goals set out by the Singapore Government.
The categories of “eligible green expenditures” are:
Sustainable water and wastewater management
Pollution prevention, control and circular economy
Climate change adaptation
Biodiversity conservation and sustainable management of natural resources and land use