PUB to issue inaugural green bonds with aim to fund projects

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

The green bonds would be part of a new $10 billion multi-currency medium-term note programme which PUB announced yesterday.

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

PUB 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 the agency.

"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," PUB said.

The framework is aligned to the International Capital Market Association Green Bond Principles 2021 and the Asean Capital Markets Forum 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 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, which are obtained as imported raw water from Malaysia, rainwater, desalination of sea water and reclaimed from wastewater (Newater).

PUB also projected Singapore's water demands to be almost double by 2060. 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 bonds are 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.

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

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.

PUB said 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.