PUB to issue inaugural green bonds later this month

The Tengeh Floating Solar Farm, PUB's first large-scale floating solar farm project at Tengeh Reservoir. PHOTO: ST FILE

SINGAPORE - National water agency PUB aims to launch its inaugural green bonds later this month, with its proceeds potentially funding planned and future projects such as floating solar panel systems.

The green bonds would be part of a new $10 billion multicurrency, medium-term note programme which PUB announced on Thursday (Aug 18).

Green bonds are financial instruments used to fund projects with environmental benefits, and provide investors with regular or fixed income payments.

The agency also established a Green Financing Framework which ensures that the green bonds follow market best practices, including strong governance and clear eligibility criteria to evaluate and identify green projects that have a positive impact on the environment, said PUB.

“Our projects will advance goals in sustainable water and wastewater management, and renewable energy. Projects must achieve reduction in greenhouse gas emissions and contribute to decarbonisation, or show improvements to the environment to qualify as green projects,” the agency added.

The framework is aligned to the International Capital Market Association (ICMA) Green Bond Principles 2021 and the Asean Capital Market Forum (ACMF) Asean Green Bond Standards 2018.

PUB has engaged an independent external reviewer, Sustainalytics, which found the framework to be credible and impactful, it said.

The framework will boost PUB’s efforts in ensuring that Singapore’s water supply remains resilient in meeting the nation’s growing water demand, and also sustainable in mitigating its impact on the environment, said the agency.

PUB’s approach comes as more extreme weather events, as a result of climate change, could impact Singapore’s water resources, obtained as imported raw water from Malaysia, rainwater, desalination of sea water and reclaimed from waste water (NEWater).

Also, PUB is projected Singapore’s water demands to almost double by 2060 due to economic and population growth. This increases the demand for desalination and NEWater, which in turn increases the need for energy.

Among the projects that could be funded by proceeds of the green bond include floating solar panel systems and the Tuas Water Reclamation Plant.

Floating solar photovoltaic (PV) systems here have helped to power energy-intensive water treatment processes in a greener way, as well as offset 8 per cent of Singapore’s total energy needs.

An artist's impression of Tuas Nexus which shows the co-location of the Integrated Waste Management Facility (left) and the Tuas Water Reclamation Plant (right). PHOTO: NEA

For instance, the clean energy generated at PUB's first large-scale floating solar farm project at Tengeh Reservoir is sufficient to power all of Singapore's local treatment plants for drinking water, equivalent to removing 7,000 cars from the roads.

Feasibility studies are being planned for two other large-scale floating solar PV systems at Lower Seletar and Pandan Reservoir, said PUB.

Currently under construction, the Tuas Water Reclamation Plant integrates used water and solid waste treatment processes to ensure energy self-sufficiency.

It will be co-located with the National Environment Agency’s (NEA) Integrated Waste Management Facility - the two combined will form the Tuas Nexus.

The project is expected to result in carbon savings of more than 200,000 tonnes of CO2 annually, equivalent to taking 42,500 cars off Singapore’s roads.

PUB said that both its projects are subject to evaluation.

It will prepare a progress report for allocation and impact reporting annually until the proceeds from its green bonds have been fully allocated.

It will also engage an independent assurance provider to review its progress report annually, which will start a year from the first green bond is issued.

Last August, NEA was the first statutory board to establish a $3 billion multicurrency medium-term note and green bond framework, with proceeds from the notes issued to finance projects such as the Tuas Integrated Waste Management Facility.

In March, the Housing Board issued some $1 billion in green bonds to fund green building projects.

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