Temasek, GIC must step up to lead in green finance

SINGAPORE, after much deliberation, has decided to join the green finance bandwagon. But if it is to make any serious dent on the already fast-growing sector, major Singapore asset owners such as Temasek Holdings and GIC must take the lead.

In a first sign of the city-state's intention to nurture the local green finance market, the Monetary Authority of Singapore earlier this year announced a green bond grant scheme to cover all expenses of issuers in obtaining an external review of green bonds, up to a cap of S$100,000 per issuance. Green bonds - part of the broad green finance market which includes low-carbon investments - are used to fund projects that have a positive impact on the environment.

Ahead of the start of this scheme this month, City Developments Limited became the first to offer a green bond in the Singapore dollar bond market in April, in a test of local investor appetite for such an asset class. The property developer's unit CDL Properties successfully sold a two-year senior secured green bond, raising S$100 million at a fixed rate of 1.98 per cent per annum. The investors were mainly financial institutions and fund managers.