Singapore Green Bond Report for Financial Year (FY) 2023: S$2.1 billion of green bond proceeds allocated to Jurong Region Line (JRL) and Cross Island Line (CRL)

 The Ministry of Finance (MOF) released the second edition of the Singapore Green Bond Report today. The report details the allocation of proceeds from Singapore’s sovereign green bonds issued under the Singapore Green Bond Framework and expected environmental impact arising from the financed Eligible Green Expenditures for Financial Year (FY) 2023. A limited assurance engagement has been undertaken by PricewaterhouseCoopers LLP in respect of the allocation of proceeds for the financial year ended 31 March 2024.

2. Ms Indranee Rajah, Minister in the Prime Minister’s Office, Second Minister for Finance and National Development and Chair of the Green Bond Steering Committee said that: “The Singapore Green Bond Framework remains a key pillar of Singapore’s efforts to channel investments into projects that will advance our sustainability efforts and contribute towards our net zero goal. This second edition of our Singapore Green Bond Report provides an update on the progress made in our national green bond programme, building on the foundation laid in last year’s report.”

Issuance and Allocation

3. The Singapore Government re-opened the 50-year Green Singapore Government Securities (“SGS”) (Infrastructure) bond in September 2023, with an issuance size of S$2.8 billion. The issuance saw strong market demand, with an overall subscription rate of 1.4 times. 

4. S$2.1 billion have been allocated¹ to finance capital expenditure of the Jurong Region Line (JRL) and Cross Island Line (CRL)² in FY2023. This comprised S$1.7 billion from the inaugural tranche of bonds issued in August 2022 and S$0.4 billion from the re-opened tranche issued in September 2023. The remaining unallocated proceeds of the re-opened tranche are expected to be fully allocated by the end of FY2025.

5. The development of JRL and CRL supports the “Sustainable Living” pillar of the Singapore Green Plan 2030, which targets to achieve 75% mass public transport (i.e. rail and bus) peak modal share. This is a key enabler to achieve the ambitious goal of significantly reducing land transport emissions in absolute terms, in alignment with Singapore’s net zero target by 2050.

Environmental Impact 

6. MOF continues to use the methodology developed by Morningstar Sustainalytics to quantify the impact arising from investment of our green bond proceeds. When fully operational, the JRL and CRL projects are estimated to result in total carbon savings of between 100,000 and 120,000 tonnes of CO2-equivalent annually.

7. This is equivalent to taking at least 22,000 cars off Singapore’s roads, and represents an estimated emissions reduction of 81% compared to the baseline scenario⁴. The allocated green bond proceeds as at end of FY2023 (i.e. S$2.8 billion as at 31 March 2024, comprising S$2.1 billion allocated in FY2023 and S$0.7 billion allocated in FY2022) are expected to have a financed impact of between 4,700 and 7,100 tonnes of CO2-equivalent emissions avoided annually⁵. 

Looking Ahead 

8. The full Singapore Green Bond Report for FY2023 can be found at https://go.gov.sg/greenbonds.

9. MOF will continue to provide annual reporting on the allocation and impact of Green SGS (Infrastructure) bonds in accordance with the Singapore Green Bond Framework, until full allocation and in case of material changes.

Issued by:

Ministry of Finance

Singapore

25 September 2024

_____________________

¹ The green bond proceeds were allocated on a First-in, First-out basis.
² The JRL and CRL projects qualify for borrowings under the Significant Infrastructure Government Loan Act 2021, and meet eligibility criteria for the “Clean Transportation” Use of Proceeds category under the Singapore Green Bond Framework.
³ The Inaugural tranche was issued in FY2022 and reported in the Singapore Green Bond Report for FY2022.
⁴ Emissions reduction refers to the reduction of greenhouse gas emissions between a baseline scenario in which the JRL and CRL do not exist, compared to the project scenario in which the JRL and CRL become operational and displace a mix of existing and future transportations along the same travel distance.
⁵ Financed emissions avoided is derived by pro-rating the estimated total project emissions avoided based on the share of green bond financing (i.e. green bond allocated as a proportion of the total project costs). Financed emissions avoided would increase correspondingly in future years as the share of green bonds allocated to the projects increase. The disclosure of financed impacts provides investors with transparency over the impact attributable to the green bond allocation.