FAQ: What you need to know about Singapore's first sovereign green bonds and are they for you?

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SINGAPORE: Following strong demand from institutional investors for Singapore's first sovereign green bonds, retail investors can apply to purchase them from Friday (Aug 5).

The S$2.4 billion bonds, called the Green Singapore Government Securities (Infrastructure) - or Green SGS (Infra) - are also the first 50-year bonds issued by the Singapore Government.

They are priced at a yield of 3.04 per cent, with a coupon rate of 3 per cent per annum.

The bulk of the issuance, about S$2.35 billion, was placed with institutional and accredited investors. The remaining S$50 million were offered to individual investors.

Here is what you need to know about the bonds and what to consider before applying for them.

What are these sovereign green bonds?

The Green SGS (Infra) bonds are part of the pipeline of up to S$35 billion of sovereign and public sector green bonds that the Government and its statutory boards will issue by 2030.

As part of the Singapore Green Bond framework published in June, proceeds from green bond issuances must adhere to guidelines and can be used to finance projects with environmental benefits, like the upcoming Jurong Region Line and Cross Island Line of the country's rail network.

Other green projects include those in renewable energy, energy efficiency, pollution prevention and climate change adaptation.

Speaking to CNA on Wednesday, KPMG Singapore director of sustainability services Cherine Fok said that she would like to see proceeds from the bonds go towards green innovation as well.

“Hopefully, at least in my own wish, I would like to see some of the funds being channelled to more green innovation,” she told CNA on Wednesday.

“We are looking at maybe different kinds of infrastructure models, more digitalisation, perhaps even more shared-service platform models that can be financed by the bond.”

The 50-year bonds have a maturity date of Aug 1, 2072. The coupons will be paid semi-annually on Feb 1 and Aug 1 for the life of the bond, starting on Feb 1, 2023.

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