Risk Assessment and Governance Frameworks for Sustainable Regional Infrastructure and Domestic Investment Incentive Strategy

1 Mr Zhulkarnain Abdul Rahim asked the Prime Minister and Minister for Finance in respect of the first close of US$510million of the Green Investments Partnership (GIP) under Singapore's Financing Asia’s Transition Partnership (FAST-P) initiative (a) what governance and risk-assessment frameworks are in place to evaluate eligible projects to support sustainable infrastructure in Southeast Asia; and (b) how will Singapore incentivise domestic private sector participation in GIP's future tranches.

Mr Gan Kim Yong (for the Prime Minister): The Green Investments Partnership (GIP) supports investments in renewable energy and storage, electric vehicle infrastructure, sustainable transport, water and waste management and other sectors critical to Southeast and South Asia's energy transition. The Government's contribution of US$51 million to the first close is in the form of grant money in order to catalyse other donors and concessional and commercial capital and make a difference to our region's transition. GIP's key partners which have contributed concessional capital include Export Finance Australia, International Finance Corporation, Temasek and Allied Climate Partners.

Pentagreen Capital is a fund manager licensed by the Monetary Authority of Singapore. Pentagreen Capital was appointed to manage GIP, in consultation with key partners involved in the design of GIP, taking into account its expertise and experience of its investment team, and the alignment of its investment focus with the objectives of the Financing Asia's Transition Partnership (FAST-P) to mobilise capital for Asia's transition.

In selecting projects for investment, Pentagreen Capital’s investment team bases its evaluation on a comprehensive set of criteria, including investment merits of the project, including project structure, and assessment of the project’s long term economic and investment performance; additionality considerations to ensure that the investment in the project results in sustainability benefits and impact, such as emission reductions; and alignment of the project with environmental and social assessments, which are based on internationally-recognised best practices and developed in collaboration with GIP's investors. This set of criteria allows Pentagreen Capital to attract and mobilise additional capital from other investors, which is the intent of the FAST-P initiative.

GIP is subject to investment governance and oversight similar to all commercially managed funds. It has an investment committee, with representatives from the fund manager and independent experts to make advisory recommendations and approve the projects prior to investment. It also has a Limited Partner Advisory Committee (LPAC) comprising representatives from major investors in GIP. The LPAC performs an oversight function with regard to GIP's investment strategy, policies and guidelines. Pentagreen Capital, as the manager of GIP, provides quarterly reports on the project and fund performance to GIP's investors.

With catalytic capital from the Singapore Government, GIP has attracted investors that are like-minded in supporting Asia's transition, including Multilateral Development Banks and Development Finance Institutions, philanthropic organisations and commercial investors. A sum of US$510 million has been committed by GIP's investors in the first round of fundraising. In the next phase of fundraising, Pentagreen Capital aims to engage and raise capital from both Singapore-based and international institutional investors to reach a target US$1 billion total fund size for GIP.