Sustainability and green finance to be factors in Singapore's new infrastructure
Singapore
AS SINGAPORE goes about building up its logistics infrastructure for a post-Covid-19 economy, alternative ways of funding these future projects will have to be found, especially with the country facing economic contraction brought by the pandemic, industry observers have told The Business Times.
The infrastructure has to be designed with sustainability in mind so as to attract green financing, they added, given the global trend among investors becoming more ready to put funds into green, sustainable assets.
Deputy Prime Minister Heng Swee Keat had pledged this month to "significantly strengthen" Singapore's entire trade and logistics ecosystem so that the country will be able to handle larger flows of food, pharmaceuticals, electronics and e-commerce".
Satya Ramamurthy, partner and head of infrastructure, government and healthcare at KPMG in Singapore, noted that the additional capacity from the country's plans for a large, automated port in Tuas and a fifth terminal at Changi Airport could serve Singapore's purposes for at least the next decade.
But building up logistics infrastructure is about more than the capacity to handle times when demand returns; these amenities have to be designed sustainably.
Marcus Ng, Deloitte's South-east Asia (SEA) leader for economics advisory and social impact advisory, said Singapore must be prepared for "a future that is greener".
The country will also need to upgrade its existing infrastructure to ride the wave of new and emerging digital trends and to capture Asian market share, said Patrick Wong, regional executive for South-east Asia at infrastructure consulting firm AECOM.
These trends include carbon markets building services as well as systems and goods related to decarbonisation of globally built infrastructure, he added.
But greener infrastructure will not come cheap.
Sreekanth APV, Singapore head of design and engineering at design and consultancy firm Arcadis, estimated that investments for first-mile infrastructure to support new mobility and for climatic adaptation measures could add up to "billions a year for island-wide implementation".
Deloitte's Mr Ng, noting that sustainable financing is gaining traction, said: "Investment in socially impactful infrastructure will be the right match for investors looking to allocate their capital to initiatives that generate broader benefits beyond just financial returns."
Meixi Gan, assistant director of sustainability at the Singapore Institute of International Affairs, said Singapore is "well positioned" to pursue business opportunities in the green economy.
She noted that "sustainability, resilience and inclusive growth have been identified as key elements of Singapore's post-Covid-19 economic strategy, and that the Monetary Authority of Singapore (MAS) has given a clear policy signal through its Green Finance Action Plan".
MAS' plan includes developing grant schemes to support green and sustainability linked loans; it also includes a US$2 billion green investments programme with asset managers committed to driving regional green efforts out of Singapore.
Ms Gan added that the country can also leverage its "strengths in building quality infrastructure and as a growing green finance centre".
Amid the weak economic outlook, enhancing infrastructure capabilities will place Singapore on a better road to recovery.
Said Deloitte's Mr Ng: "Whether it is about improving productivity by reducing commuter travel time or goods shipping costs, or about securing a greener future, the purpose of investing in infrastructure is to lift our standard of living and to create a positive legacy for economic growth that is more resilient, sustainable, and productive."
