New international panel to advise on S'pore's sustainable infrastructure strategies

Second Minister for Finance Indranee Rajah meeting members of the new Asia Sustainable Infrastructure Advisory Panel. ST PHOTO: GAVIN FOO

SINGAPORE - As countries recover from the Covid-19 pandemic, there are opportunities to reset and rebuild, especially in the area of sustainable infrastructure.

This is why Singapore has set up an international panel of experts to advise on the latest trends and best practices in sustainable infrastructure, as well as identify investment opportunities for the private sector, said Second Minister for Finance Indranee Rajah on Thursday (June 24).

"We felt that the breadth and depth of their expertise, plus their global perspective, would be beneficial in helping us refine strategies, broaden our outlook and bring in fresh ideas," she told The Straits Times.

Ms Indranee, who is also Minister in Prime Minister's Office and Second Minister for National Development, was describing the new Asia Sustainable Infrastructure Advisory (ASIA) Panel, which she chairs and which was launched at the Asia Infrastructure Forum on Wednesday.

Joining her for a meeting at the Botanic Gardens on Thursday were three of the panel's members: Centre for Liveable Cities (CLC) chairman Cheong Koon Hean, Guggenheim Investments chief investment officer Scott Minerd, and Columbia University adjunct professor and former chief executive of the World Bank's Multilateral Investment Guarantee Agency Keiko Honda.

Other members include waste recovery platform Anaergia's chief executive Andrew Benedek, chairman of the Capella Hotel Group Guy Harvey-Samuel, Cambridge University geotechnical and civil engineering professor Lord Robert Mair, and chief executive of greentech company Envision Group Zhang Lei.

While the global sustainable debt market reached US$1.7 trillion (S$2.3 trillion) last year, 80 per cent of it is concentrated in developed markets such as the European Union and the United States.

Is there any way to accelerate the flow of financing into Asia?

Guggenheim Investments' Mr Minerd said that because the EU and US are deep capital markets, they are the first stop for anyone who wants to raise money.

"But I think there will be a natural evolution over time, especially in financial centres like Singapore, Tokyo and Hong Kong."

Singapore, he said, has a role to play even though its capital pool is not as deep as countries with large pension funds, such as Japan.

He noted that Singapore's sovereign wealth fund GIC and investment company Temasek could catalyse the Republic as a place where people from the region can raise capital for sustainable projects.

Ms Indranee said the key to making projects bankable is to structure them properly, so that financiers have the assurance that their investment will pay off.

Such projects have positive effects on job creation, such as in professional services, she said.

The growing demand for sustainability advice has spurred law firms to establish practices dedicated to environmental, social and governance (ESG) matters, with at least two of the Big Four firms in Singapore doing so in the last six months.

"We need the consultants, the lawyers and financiers," she added. "If you can get the sustainable projects off the ground, that would mean jobs for the engineers, quantity surveyors, and technicians all down the line."

Mr Minerd said technology is important to drive down costs and achieve greater efficiency.

An example is solar energy, which for years operated at a "huge disadvantage", as it had to be sustained with hefty government subsidies. But technology has since rendered solar-produced electricity much cheaper than that from oil-fired power plants, he said.

He also sees potential for hydrogen in the renewable energy space, but acknowledged that the world is still "too low on the innovative curve" in this area.

CLC's Dr Cheong said that it takes time and experimentation to make technological improvements economically viable.

When Singapore embarked on solar energy, she said, the Government subsidised the cost of solar panels. But within a few years, the price of solar panels came down significantly.

"We didn't have to subsidise (any longer) and moved to different procurement models, such as the solar leasing model," she said, referring to the third-party financing and operating model for solar power systems here.

Singapore, she added, has also transitioned to integrated solutions such as district cooling for new towns like Tengah.

Here, chilled water will be piped to homes from centralised chillers installed on the rooftops of selected Housing Board blocks. This is more energy-efficient compared with conventional air-conditioning.

An app controls the temperature and the air-conditioning unit powered by a centralised cooling system at the MyTengah Experience Centre. ST PHOTO: CHONG JUN LIANG

Columbia University's Ms Honda said more has to be done to facilitate the smooth transition of existing energy supply investments to a low-carbon future.

For example, it is still cheaper to run coal-fired power plants than solar-powered ones in some countries such as the US and China, depending on factors such as the size and location of the plant, she said.

Mr Minerd said it is important when debating the issue to make a distinction between the cost of existing energy generation, and the cost of what some call "new-build" energy generation - or comparing different technologies as if their operating lives started today.

"People are stuck with legacy assets, and don't want to acknowledge that the investment they made in a coal facility 10 years ago may be worthless now, if they were going to start over," he said.

Ms Indranee observed that much of the conversation so far - such as the idea that coal is bad - has been binary in nature.

Having a discussion on transitions is a crucial intermediate step, she said. "We have to get to a point where there's optimum sustainability, and this difficult passage has not been fully fleshed out yet."

The ASIA panel will hold its first formal meeting in November.

It is also planning to co-organise three public discussions with the Asean Secretariat, United Nations Environment Programme and the Group of 20's Global Infrastructure Hub, on topics such as the future of infrastructure, technology in infrastructure, and sustainable financing.

The discussions will feed into the work of Infrastructure Asia (IA), an office jointly set up by Enterprise Singapore and the Monetary Authority of Singapore to connect private and public investors with infrastructure needs.

"The discussions will centre around identifying sustainable strategies that IA can pursue and foster in the region. We want to do something meaningful and practical with a definite outcome," said Ms Indranee.

Join ST's WhatsApp Channel and get the latest news and must-reads.