Singapore Helps Businesses Go Green with New Sustainability Program
On October 4, 2021, Enterprise Singapore (ESG) — a statutory board under Singapore’s Ministry of Trade responsible for supporting the development of small and medium enterprises — launched the Enterprise Sustainability Program to help local companies develop capabilities to seize opportunities in the green economy.
ESG has set aside S$180 million (US$133 million) for the program, which is expected to benefit over 6,000 businesses over the next four years through training workshops, project financing, and other support.
The sustainability program is part of the government’s push to implement the Singapore Green Plan 2030, a ‘whole-of-the-nation’ movement spearheaded by several ministries to chart Singapore’s green targets over the next 10 years. Under the plan, the government aims to achieve zero-net emissions as soon as viable in the second half of the century through initiatives like reducing the amount of waste sent to landfills by 30 percent by 2026 and doubling the number of electric vehicle charging points by 2030.Singapore’s solar energy capacity has grown more than six times over the last five years, and the country is targeting to increase solar power deployment to at least two gigawatt-peak by 2030 or enough to power over 350,000 households per year.
Moreover, the nation is planning to tap regional power grids. In March 2021, the government embarked on a trial to import 100 MW of electricity from Malaysia.
As a small city-state with no natural resources and land, Singapore lacks the capabilities to develop large-scale deployment of renewable energy sources. However, the country has the potential to become a carbon service hub, providing expertise to businesses on how to manage their carbon footprint.
What are the components of Singapore’s enterprise sustainability program?
The enterprise sustainability program has three key component schemes:
- Developing sustainable enterprises;
- Strengthening sector-specific capabilities; and
- Fostering a vibrant and conducive sustainability ecosystem.
Developing sustainable enterprises
Under this scheme, ESG will provide subsidized training workshops for businesses looking to develop their sustainability programs. These workshops are designed to build awareness and knowledge as well as provide access to the relevant tools to plan for long-term capability building. ESG has partnered with Global Compact Network Singapore (GCNS), PwC Singapore, and the Singapore Environment Council (SEC) for this scheme.
The scheme also supports resource optimization and will help businesses adopt the relevant standards. Finally, ESG will support enterprises to develop sustainable services, products, and other solutions to capture opportunities in the green economy.
Strengthening sector-specific capabilities
Partnering with Trade and Association Chambers (TACs), government agencies, and corporates is a key element of the program. ESG’s partner TACs include the Singapore Contractors Association Limited (SCAL), the Textile and Fashion Federation (TaFF), and the Singapore Furniture Industries Council (SFIC). Through such partnership, ESG can facilitate cross-sector collaboration for sector-specific training courses, and help businesses uplift their sustainability capabilities throughout their value-chains.
Fostering a vibrant and conducive sustainability ecosystem
ESG with its industry partners and government agencies aims to strengthen the sustainability ecosystem through financing, training, certification, among others.
One initiative has been the launch of Enterprise Financing Scheme-Green (EFS-Green), a new financing scheme to help businesses develop green technologies. EFS-Green covers a range of financing needs which include:
- Developmental capital;
- Fixed assets loan;
- Project loan;
- Trade loan;
- Venture debt loan; and
- Merger and acquisition (M&A) loan.
Interested enterprises can approach any of the following approved financial institutions to apply for a loan:
- OCBC; and
Effective from October 1, 2021, until March 31, 2024, EFS-Green offers risk sharing of up to 70 percent to catalyze the lending from partner financial institutions. The maximum loan quantum varies for each loan type, ranging from S$30 million (US$22.2 million) for fixed asset loans and up to S$50 million (US$37.1 million) to finance the M&A) of target enterprises related to green initiatives.
Moreover, the maximum repayment period also varies between loan types, ranging from five to 20 years. The borrower is responsible for the repayment of 100 percent of the loan, and if a default occurs, the partner financial institution is obligated to follow their standard commercial recovery procedure before making a claim against ESG for the unrecovered amount.
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