The National Environment Agency (NEA) of Singapore on September 6 priced its inaugural green bond amounting to S$1.65 billion (US$1.23 billion) in two tranches to help fund its flagship waste management project – the Tuas Nexus Integrated Waste Management Facility (IWMF). The offering represented the largest maiden bond issuance by a Singapore statutory board.

The transaction comprised 10-year fixed rate notes amounting to S$350 million with a coupon of 1.67% per annum, and 30-year fixed-rate notes amounting to S$1.30 billion with a coupon of 2.50% per annum. The 30-year tranche is the longest tenor green bond denominated in Singapore dollar to date and also the longest tenor unrated public green bond in Southeast Asia.

The deal attracted a total demand in excess of S$2 billion, with 98% generated from Singapore and 2% from other jurisdictions. Fund managers and agencies drove the transaction as they accounted for 90% of the bonds, while banks bought 9% and private banks 1%. The bonds are issued under the NEA’s S$3 billion multi-currency medium-term note (MTN) programme, which was set up to finance its sustainable infrastructure development projects, starting with the Tuas Nexus IWMF.

Commenting on the transaction, DBS’ global head of fixed income Clifford Lee says the robust take up of the NEA’s first green bond demonstrates that the market is ready to throw its support behind Singapore’s sustainable development plans.

“Investors are also signalling that sustainable infrastructure development will give Singapore a competitive advantage and are willing to invest in industry initiatives that bring long-term gains,” Lee notes. “The strength of this issuance is a watershed moment as it demonstrates that investors will respond positively when there is a trusted standard for issuers and investors to rely on, in this case the NEA green bond framework.”

The NEA's CEO Luke Goh says the completion of the Tuas Nexus IWMF will significantly boost Singapore’s resource management capabilities. “In particular, it will process different waste streams at much higher efficiency and reduce Singapore waste management’s overall carbon footprint,” he adds.

Tuas Nexus IWMF is an integral part of  the NEA’s long-term plan to meet Singapore’s solid waste management requirements. It will be Singapore’s first integrated facility to treat incinerable waste, source segregated food waste and dewatered sludge. The facility will also have the capability to sort household recyclables collected under the national recycling programme.

DBS acted as the sole arranger of the NEA’s MTN programme and green structuring adviser for its green bond framework.