9-7-2024 (SINGAPORE) Singapore and Laos have forged a groundbreaking agreement on carbon credits, paving the way for bilateral trade in this emerging sector and deepening a 50-year friendship between the two countries.
The landmark deal, inked on July 9, was hailed by Prime Minister Lawrence Wong as “opening yet another new frontier of cooperation” during a luncheon hosted for his Lao counterpart, Prime Minister Sonexay Siphandone, who was on his inaugural official visit to Singapore since assuming office in December 2022.
Addressing a gathering of delegates from both nations at the Conrad Centennial Singapore, PM Wong expressed Singapore’s eagerness to collaborate closely with Laos to finalize the legally binding Implementation Agreement on carbon credits collaboration, further cementing the mutually beneficial bonds between the two nations.
The agreement sets forth a bilateral framework for the international transfer of correspondingly adjusted carbon credits and the exchange of best practices and knowledge on carbon market mechanisms, according to the Ministry of Trade and Industry. Aligning with Article 6 of the Paris Agreement, the 2015 international treaty on climate change, the deal fosters cooperation in achieving emission targets and tackling climate change while unlocking financial support for developing countries.
“It will help us to achieve our climate targets, facilitate investments, create jobs, promote sustainable development, and encourage the deployment of clean technology,” PM Wong affirmed.
Dr. Sonexay’s one-day visit began with a ceremonial welcome by PM Wong at Parliament House, where the two leaders witnessed the signing of the memorandum of understanding (MOU) related to carbon credits collaboration. The MOU was inked by Minister for Sustainability and the Environment Grace Fu and Lao Minister of Natural Resources and Environment Bounkham Vorachit.
The two nations’ collaboration in the green economy extends beyond the carbon credits deal. In June 2022, Singapore commenced importing up to 100MW of renewable hydropower energy from Laos – one of Asia’s largest exporters of hydroelectricity – through Thailand and Malaysia, via existing interconnections. This cross-country effort, known as the Lao People’s Democratic Republic-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP), lays the foundation for an ASEAN Power Grid, deepening energy connectivity and strengthening regional energy resilience, as highlighted by PM Wong.
“We look forward to the enhancement and expansion of the LTMS-PIP into its second phase, which will also be in line with Laos’ plans to become the ‘Battery of Asean’,” he added.
In his speech at the luncheon, Dr. Sonexay reaffirmed Laos’ commitment to the shared ties with Singapore, “nurtured and cherished by our predecessors over the last 50 years.” He affirmed that both countries have agreed to continue deepening cooperation in areas including promoting clean energy under the LTMS-PIP, with Laos facilitating the expansion of the power grid to supply energy to Singapore and ensure energy security.
Other areas of cooperation discussed encompassed utilizing food supply as a means to increase trade and investment, as well as emerging facets such as public health and banking, Dr. Sonexay stated.
Separately, an MOU on education cooperation, initially signed in 2018, was renewed at Parliament House. The MOU, signed by Education Minister Chan Chun Sing and Lao Minister for Education and Sports Phout Simmalavong, enhances collaboration in areas such as student exchanges, information and best practice sharing, and academic scholarship opportunities.
PM Wong expressed confidence that the educational collaboration would forge closer bonds between the youth of the two countries, “paving the way for our relations to flourish over the next generation.”
“Singaporeans are interested in doing more with Laos,” he added, citing examples such as Singaporean student groups visiting Laos annually for community projects and businesses exploring opportunities in sectors like logistics and tourism, a testament to the strong people-to-people ties.
As Singapore celebrates the 50th anniversary of bilateral relations with Laos, the current chair of ASEAN, in 2024, PM Wong reiterated the Republic’s full support for Laos’ ASEAN chairmanship, including through the Singapore-Laos Enhanced Cooperation Programme, which supports Laos’ socioeconomic development goals through ongoing capacity-building programmes and training.
“I also look forward to visiting Laos again later this year for the ASEAN Summits,” he said, referring to the 44th ASEAN Summits to be held in Vientiane, Laos, in early October.
During his visit, Dr. Sonexay also called on President Tharman Shanmugaratnam and met with Senior Minister Lee Hsien Loong at the Istana. Both SM Lee and President Tharman affirmed the growing ties between the countries and the emerging areas of cooperation.
Besides exchanging views on regional and international developments, SM Lee and Dr. Sonexay noted the progress made in bilateral relations, according to the Ministry of Foreign Affairs (MFA). Separately, Dr. Sonexay and Mr. Tharman discussed ways to continue nurturing people-to-people ties, the foundation of bilateral cooperation, MFA stated.
“In a world which has to move to clean energy, and where rare earths too are in increasing demand, Laos’ natural assets will now also be of economic benefit,” wrote Mr. Tharman in a Facebook post, noting that 40 percent of Laos is covered in forests and highlighting the Southeast Asian country’s significant potential to develop carbon credits as a new source of funding.
Dr. Sonexay’s official visit concluded at the National Orchid Garden, where a new orchid hybrid, the Dendrobium Sonexay Siphandone, was named in his honor, symbolizing the blossoming partnership between the two nations.
