21-9-2023 (SINGAPORE) In a significant move towards bolstering its commitment to sustainable infrastructure, Singapore has allocated S$700 million (equivalent to US$511 million) for the financing of the Jurong Region Line (JRL) and the Cross Island Line (CRL) within the nation’s expansive rail network. This allocation constitutes 30 per cent of the S$2.4 billion Green Singapore Government Securities (Infrastructure) bond proceeds, as of March 31 of the current year.
The Ministry of Finance (MOF) unveiled these details in the inaugural edition of the Singapore Green Bond Report, released on Thursday, September 21. As disclosed by MOF, the remaining S$1.7 billion in proceeds are expected to be fully designated for the JRL and CRL projects by the conclusion of the fiscal year 2024.
These monumental 50-year sovereign green bonds, originally issued in August 2022, marked Singapore’s inaugural foray into the realm of sustainable debt. A second tranche of Green SGS (Infra) bonds was subsequently issued on September 4, 2023, with detailed allocation and impact information slated for inclusion in the forthcoming annual report.
These investments form part of a comprehensive plan, involving up to S$35 billion in sovereign and public sector green bonds to be issued by the Government and its statutory boards by 2030. As of March 31, S$8.2 billion of green bonds have already been issued across four essential green categories: clean transportation, waste management, green building, and sustainable water.
Singapore’s Second Minister for Finance and National Development, as well as Chair of the Green Bond Steering Committee, Indranee Rajah, emphasized the crucial role of sustainable finance in combating the climate crisis. In the report, she asserted that sustainable finance serves as a catalyst for decarbonization, addressing the “defining challenge” of our generation: climate change.
Under the Singapore Green Bond Framework, funds generated from these green bond issuances must strictly adhere to established guidelines and be deployed for projects encompassing renewable energy, energy efficiency, pollution prevention, and climate change adaptation.
The projects supported by these green bond proceeds will play a pivotal role in Singapore’s transition to a low-carbon economy. Furthermore, they will position the nation favorably in achieving its climate objectives under the Paris Agreement and commitments outlined in the United Nations’ Sustainable Development Agenda.
Currently, the land transport sector is responsible for approximately 15 per cent of carbon emissions in Singapore. As articulated in the MOF report, the expansion of public transport infrastructure and the electric rail network is a fundamental strategy in reducing the carbon footprint of this sector.
The Monetary Authority of Singapore (MAS) underlined the significance of the electric rail network’s expansion in enhancing connectivity and encouraging greater utilization of mass public transport. This sentiment was expressed in a separate press release issued in August 2022.
The development of both the JRL and the CRL aligns seamlessly with the “Sustainable Living” pillar of the Singapore Green Plan 2030, which aspires to attain a 75 per cent mass public transport modal share.
Ms Indranee, while elaborating on the expansion of the electric rail network, stated, “The expansion of Singapore’s electric rail network is a key enabler to achieve our ambitious goal of significantly reducing land transport emissions in absolute terms, in alignment with Singapore’s target to achieve net zero by 2050.”
Furthermore, the MOF report projected that once both rail lines are fully operational, they will result in a total reduction of carbon emissions ranging from 100,000 to 120,000 tonnes of carbon dioxide equivalent annually.
To put this into perspective, MOF highlighted that this reduction is equivalent to removing 22,000 cars from Singapore’s roadways. MOF further disclosed that it engaged an independent consultant, Morningstar Sustainalytics, to formulate a methodology for calculating the avoided greenhouse gas emissions and air pollutants resulting from investments in the electric rail projects.
According to MOF’s findings, the project emissions avoided range from 100,000 to 120,000 tCO2e of greenhouse gas (GHG) emissions annually, while the financed emissions avoided span from 1,200 to 1,800 tCO2e of GHG emissions per year. Both figures have been rounded to two significant figures.
MOF has committed to providing annual updates on the estimated impact in forthcoming green bond reports.
