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Easier access to green financing for Singapore firms

Easier access to green financing for Singapore firms

The skyline of Singapore's financial district. (File photo: AFP/Simin Wang)

SINGAPORE: Singapore businesses that want to develop solutions to reduce waste and greenhouse gas emissions may find it easier to gain access to financing via a new government scheme.

Under the new Enterprise Financing Scheme-Green, the Government will provide 70 per cent risk-share for loans made by participating financial institutions to local firms that fall under the following categories, Enterprise Singapore said in a news release on Sunday (Oct 3).

They are: Project developers, system integrators, as well as technology and solution enablers from the sectors of clean energy, circular economy, green infrastructure and clean transportation sectors.

For instance, project developers refer to local firms that develop, manufacture, build and operate capital-intensive green projects which incorporate proprietary engineering, technologies or solutions with a “positive environmental impact”.

Enterprise Singapore said the new financing scheme covers a range of financing needs, including developmental capital, fixed assets, trade, project, venture debt, and mergers and acquisition.

It is effective from this month to the end of March in 2024.

This follows the announcement of the Enterprise Sustainability Programme on Friday.

The programme, administered by Enterprise Singapore, aims to help local businesses build capabilities in the area of sustainability so as to seize opportunities in the green economy.

The new Enterprise Financing Scheme-Green is an enhancement of the existing Enterprise Financing Scheme, which currently extends financing help to firms in six areas, such as the daily operational cashflow needs of SMEs and trade needs.

Enterprise Singapore’s chief executive officer Png Cheong Boon said demand for green solutions is set to grow globally.

The new scheme will therefore help “green technology innovators in Singapore to have easier access to green financing, in order to create ever-evolving, ever-improving solutions,” he added.

“These enterprises are pushing new boundaries and bearing additional risks in enabling technologies for the transition towards a green economy. This in turn will help other enterprises adopt green solutions and capture opportunities globally,” said Mr Png.

The Enterprise Financing Scheme-Green will be supported by partner financial institutions, including DBS, HSBC, OCBC and UOB.

These institutions have developed green and sustainability financing frameworks for SMEs and businesses approved by the Monetary Authority of Singapore’s recognised consultants, Enterprise Singapore said.

Representatives of the partner banks welcomed the new financing scheme, with UOB’s group head of commercial banking Eric Tham noting that it offers a full spectrum of banking facilities and comes as sustainability is a “global imperative”.

OCBC said it has seen “strong interest” from SMEs seeking to kick-start and accelerate their green efforts over the past two years, despite challenges from the COVID-19 pandemic.

“The launch of the EFS-Green scheme is timely and we believe will equip many more SMEs with green loans to build new capabilities, tap new markets and differentiate their products and services,” said its group head of global commercial banking Linus Goh.

Apart from SMEs, the new scheme also has the potential to further catalyse Singapore’s growth in emerging sectors. These include clean energy and decarbonisation, circular economy, clean transportation and green infrastructure, according to DBS’ group head of SME banking Joyce Tee.

Meanwhile HSBC said the Singapore Green Plan 2030 has set out a “firm roadmap” towards green and sustainable development in the country.

“The firms of the future will be those with the foresight to mitigate and adapt now in order to thrive,” said Ms Regina Lee, the bank’s head of commercial banking in Singapore.

“The EFS-Green scheme is a direct, measurable scheme which will channel capital towards eligible businesses that are working towards the shift to a lower carbon economy.”

Source: CNA/vc

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