PUB plans to launch inaugural green bonds in August

SINGAPORE: Singapore's national water agency PUB plans to launch its inaugural green bonds later this month.

The bonds will be part of a new S$10 billion multicurrency medium-term note programme, the agency said on Thursday (Aug 18).

"This will mark another milestone in PUB’s journey to advance sustainable development and climate action," PUB added.

A green financing framework has been established to fund planned and future green projects to support PUB's sustainability efforts. The agency said that the establishment of the framework will contribute to Singapore Green Plan 2030. 

"It is also a boost to PUB’s continuing efforts and innovation to ensure a resilient and sustainable water supply for Singapore, which remains critical amid the challenges of climate change," said the agency.

Climate change will result in more extreme weather events that may impact Singapore's water resources. Demand for water is projected to almost double by 2060 in tandem with economic and population growth, said PUB.

"The need to tap increasingly on NEWater and desalination will also increase our energy needs to meet growing water demand," it added.

PROJECTS

The green financing framework will ensure that the green bonds adhere to 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.

These projects will advance goals in sustainable water and wastewater management, as well as renewable energy, it added.

To qualify as green projects, they must achieve a reduction in greenhouse gas emissions and contribute to decarbonisation, or show improvements to the environment.

The potential projects that are eligible to be financed with proceeds from green bonds include the Tuas Water Reclamation Plant and floating solar photovoltaic projects.

The Tuas Water Reclamation Plant is under construction and will be located with the National Environment Agency's Integrated Waste Management Facility to form Tuas Nexus. 

"It marks Singapore’s first initiative to harness potential synergies of the water-energy-waste nexus by integrating used water and solid waste treatment processes to be energy self-sufficient," said PUB.

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

Land and floating solar photovoltaic systems have been installed by PUB in reservoirs, which has offset about 8 per cent of Singapore's total energy needs.

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

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

REPORTING ON USE OF PROCEEDS

PUB's green financing framework is aligned with the International Capital Market Association (ICMA) Green Bond Principles 2021 and the ASEAN Capital Market Forum's (ACMF) Green Bond Standards 2018. 

The agency has also engaged an independent external reviewer Sustainalytics to provide a second-party opinion on the framework.

"Sustainalytics is of the view that PUB’s green financing framework is credible and impactful and aligns with the four core components of the ICMA Green Bond Principles 2021," said PUB.

Under the framework, the agency will prepare a progress report for allocation and impact reporting on an annual basis until the full allocation of proceeds of its green bonds.

It will also engage an independent assurance provider to review its progress report on an annual basis, including the net proceeds and impact of its green bonds.

The annual review will start a year from the issuance date of the first green bond. PUB said more information on its issuance of green bonds would be announced "in due course".