Data centres can be financed with Singapore green bonds under revised framework
Water and air transport infrastructure can now also be funded by the proceeds of these debt instruments
DATA centres that meet the green building rating system laid out by the Building and Construction Authority are among some of the new economic activities that can be financed with green bonds issued by Singapore’s government, following updates to the national green bond framework.
Water and air transport infrastructure, such as electric charging or hydrogen-based refuelling of vessels and aircraft, are also two new additions to the list of activities that can be financed by the proceeds of these green-labelled debt instruments.
These revisions are a result of aligning the Singapore green bond framework – which lays out the type of public-sector projects the government can undertake through the use of these funds – with the latest market standards, including the Singapore-Asia Taxonomy, said the Ministry of Finance (MOF) on Thursday (Jan 23).
Finalised at the end of 2023 after four rounds of consultation, the Singapore-Asia Taxonomy defines economic activities in various sectors that are eligible for sustainable or transition financing.
As the Singapore green bond framework was launched earlier in June 2022, the economic activities eligible for green-bond financing could not reference the national taxonomy.
It was developed to align with market standards and principles that existed at that time, which included the green bond principles from the International Capital Market Association (ICMA) and green bond standards developed by a grouping of Asean capital market regulators.
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On top of detailing how the government intends to use the green bond proceeds, the framework also serves as a reference for the green bonds issued by statutory boards.
Besides including new economic activities with the latest revision to the framework, more details were added for economic activities that were already listed in the first edition.
These include providing thresholds on emissions intensity, water loss and waste recovery – all taken from the Singapore-Asia Taxonomy – across various sectors, including power generation, water management and the circular economy.
MOF said the inclusion of these thresholds ensures that the projects financed by public-sector green bonds will contribute substantially to Singapore’s climate ambitions.
In addition to the Singapore-Asia Taxonomy, DNV, which was appointed as an independent external reviewer, has assessed that the updated framework is also aligned with ICMA’s green bond principles, as well as the Asean Green Bond Standards.
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