Project Financing Support for SMEs Venturing Overseas

Date: 13 August 2012

To ask the Deputy Prime Minister and Minister for Finance:

Whether his Ministry will consider setting up a low-cost and smaller-scale project financing vehicle for SMEs to encourage them to heed the Government's call to venture overseas, similar to the type of project financing support provided by the Temasek Holdings-backed company Clifford Capital.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

Mr. Teo Siong Seng suggested setting up a low-cost and smaller-scale project financing vehicle for SMEs to support their internationalisation efforts.

IE Singapore provides a range of financing schemes to help Singapore businesses in their internationalisation efforts. For example, through the Internationalisation Financing Scheme (IFS), the Government co-shares up to 70% of default risks of up to $15 million of credit facilities to finance the working expenses of secured overseas projects. This improves access to financing at generally lower cost. Since 2007, IFS has supported $1.1 billion of financing, of which 73% were to SMEs.

Clifford Capital was set up to address gaps in larger and long-tenure project financing identified by the Economic Strategies Committee (ESC). It will be run on a commercial basis as recommended by the ESC, and will evaluate requests for financing on their commercial merits. All companies, including SMEs, can seek financing from Clifford Capital. Further, opportunities for Singapore companies abroad which are of significant scale will have the potential of benefiting not only our larger companies but any smaller suppliers or contractors that they may work with.