Singapore updates Green Bond Framework and reports on green budgeting progress
26 February 2025
On 23 January 2025, the Ministry of Finance (“MOF”) announced that the Singapore Green Bond Framework (“Framework”) has been updated for alignment with the Singapore-Asia Taxonomy for Sustainable Finance (“Singapore-Asia Taxonomy”). MOF also issued an occasional paper, Green Budgeting in Singapore: A Progress Update (“Occasional Paper”), outlining the Government’s green budgeting approach. Green budgeting takes into account sustainability considerations in the management of Singapore’s public finances and supports the commitment to climate action.
Revised Singapore Green Bond Framework
The Framework governs the issuance of sovereign green bonds under the Significant Infrastructure Government Loan Act 2021 (SINGA), and also serves as a reference for statutory boards’ respective green bond frameworks. The proceeds from such issuances are used to finance green public sector projects. The Framework ensures that the public sector upholds a high level of green standards in line with best practices in the industry and is an important component of Singapore’s overarching sustainability strategy.
This second edition of the Framework is aligned with the Singapore-Asia Taxonomy for green activities and provides transparency on the screening criteria for projects to qualify for green bond financing. The addition of these science-based and robust thresholds ensures that the projects financed by public sector green bonds under the Framework will contribute substantially to Singapore’s climate ambition.
The Framework continues to be aligned with the core components and key recommendations of the International Capital Market Association Green Bond Principles and the ASEAN Capital Markets Forum ASEAN Green Bond Standards. The Framework details the Government’s (i) intended use of green bond proceeds, (ii) governance structure to evaluate and select eligible projects, (iii) operational approach to manage green bond proceeds, and (iv) commitment to post-issuance allocation and impact reporting.
DNV, an independent external reviewer, has provided a second-party opinion on the green credentials of the Framework.
Green budgeting occasional paper
MOF explains that the Government’s budgeting framework has been enhanced over the years in tandem with Singapore’s latest national strategies and targets on climate and sustainability. The Government’s green budgeting approach seeks to align with international frameworks and practices, to support the development and implementation of environmentally friendly policies. At the same time, the Government has designed its green budgeting approach to be efficient and fit for purpose, as well as to keep the administrative cost and burden manageable.
The Government proactively manages climate-related risks in its development plans, and accounts for various climate risks on Singapore’s revenue and expenditure. The Government has made long-term plans, and deployed fiscal measures to ensure that the Government has the resources to materialise these medium- to long-term plans. Under the Singapore Green Plan, the Government expects to commit over S$10 billion in fiscal spending in the decade up to FY2030 (i.e. FY2021 to FY2030). Beyond the Green Plan, there will be significant additional areas of spending in carbon mitigation and adaptation, for which the plans are under development. The Government has introduced various fiscal tools to fund such sustainability measures beyond 2030, including the use of green bonds, and the establishment of the Coastal and Flood Protection Fund and Future Energy Fund.
Reference materials
The following materials are available on the MOF website www.mof.gov.sg: