SINGAPORE - Some $35 billion of green bonds will be issued by 2030 to fund public sector green infrastructure projects, as the nation moves to tap opportunities in green finance.
Green bonds are financial instruments used to fund projects with environmental benefits, and provide investors with regular or fixed income payments.
The Government will publish a Singapore Green Bond framework, and issue its inaugural green bond later this year, said Finance Minister Lawrence Wong in his Budget statement on Friday (Feb 18).
This comes as emerging sectors such as in green finance and carbon services grow in prominence.
"Millions of new green jobs will be created around the world, and demand for talent with green skills will increase," said Mr Wong.
Recent developments in Singapore on this front include a new green bonds programme office under the Ministry of Finance that was set up in September last year to speed up the Government's efforts in the area of green bonds.
And last August, the National Environment Agency was the first statutory board to establish a $3 billion multi-currency medium-term note and green bond framework.
Proceeds from the notes issued will be used to finance sustainable infrastructure development projects such as Tuas Nexus - Singapore's first integrated water and solid waste treatment facility.
In the financial service sector, green finance is one of the fastest-growing segments, with Singapore now accounting for close to half of the Asean green bond and loan market, Mr Wong noted.
"We aim to do more, so that banks and financial institutions will use Singapore as a base to develop their capabilities and... innovative green financial solutions to service their customers all over Asia."
Green bonds can also be used to finance infrastructure upgrades for electric vehicles, he added.
Singapore had earlier announced its intention to phase out internal combustion engine vehicles by 2040. For passenger vehicles, the most promising clean energy option is electric vehicles.
Mr Wong pointed out that electric vehicle share of new car registration had jumped from 0.2 per cent in 2020 to around 4 per cent last year.
"Given this momentum, we will further accelerate electric vehicle adoption by building more charging points closer to where we live," he added.
"To do this, infrastructure upgrades will be necessary, and the financing can come from green bonds."
Aside from green finance, Mr Wong also highlighted carbon services as an area of green growth for the country.
Carbon services refer to services that help firms reduce the amount of planet-warming gases, such as carbon dioxide, that they release.
These services include clean energy project development or financing, as well as consultancy, audit and certification services that help firms in their efforts to measure, reduce and manage emissions.
One example of a carbon service includes carbon offsetting, where companies may choose to buy a carbon credit from a renewable energy plant or a forestry restoration project developer elsewhere to "offset" their emissions.
Each time a project verifies it has reduced or avoided one tonne of greenhouse gases, one carbon credit is created.
The buying and selling of these carbon credits require financial expertise, creating new roles for carbon brokers and traders.
There are more than 70 organisations involved in carbon services and trading in Singapore, according to a new report commissioned by economic agencies here, The Straits Times reported in January.
Said Mr Wong: "We can become the go-to location in Asia for expertise in carbon services, and the trusted regional marketplace for carbon credits."