SINGAPORE Law and Practice Contributed by: Renu Menon, May Ng, Blossom Hing, SC and Ong Ken Loon, Drew & Napier LLC
8.6 Common Financing Sources and Typical Structures Project financing typically involves a mix of various financing sources and structures. Some options are listed below. Bank Financing Commercial banks Bank loans are a primary source of financing for pro- ject finance in Singapore. Banks often provide term loans or revolving credit facilities, structured around the project’s cash flows. Islamic financing Given Singapore’s growing Islamic finance sector, Sharia-compliant financing options, such as Mura- baha, Istina’a, Wakala or Ijara, may also be utilised in project finance. Export Credit Agency (ECA) Financing Singapore-based projects involving international sup- pliers may benefit from financing through ECAs. These agencies provide guarantees and loans to mitigate risks associated with exporting goods and services. For example, ECICS, the Singapore ECA can support projects that require export credit. Project Bonds Issuing project bonds is a viable financing option for large-scale infrastructure projects. These bonds are typically backed by the project’s cash flow and may be rated by credit rating agencies. For example, bond proceeds of the Singapore sovereign green bonds (known as Green Singapore Government Securities (Infrastructure)) are used to finance green infrastruc- Natural resources projects involve unique issues and considerations, particularly regarding resource man- agement, export regulations, and local beneficiation. Export Regulations Restrictions on exports ture projects in Singapore. 8.7 Natural Resources Singapore has few restrictions on the export of most natural resources. However, specific regulations may apply to controlled commodities, such as hazardous materials and certain minerals. The Ministry of Trade
and Industry and other regulatory bodies oversee export controls to ensure compliance with interna-
tional trade obligations. Resource Management Land use and resource management
The management of land and resources is governed by laws such as the Planning Act 1998 and the Land Acquisition Act 1966. These laws regulate land use and development, impacting the feasibility of natural resources projects. Environmental considerations Natural resources projects are subject to environ- mental regulations, primarily under the Environmental Protection and Management Act 1999. Environmen- tal impact assessments are often required to evalu- ate potential impacts on the environment and ensure compliance with sustainability standards. While there is no strict legal requirement mandating beneficiation, the government encourages value- added processing, manufacturing and provides for tax benefits and cash grants particularly in the realms of sustainability projects. This is aligned with the Sin- gapore government’s efforts to be the leading centre for sustainable and green finance in Asia and globally. Refer to 1.6 ESG/Sustainability-Linked Lending for further details. 8.8 Environmental, Health and Safety Laws In Singapore, several laws and regulatory frameworks govern environmental, health and safety aspects, including the following. Environmental Laws Environmental Protection and Management Act 1999 This covers pollution control, waste management, and environmental impact assessments for certain projects. Environmental Public Health Act 1987 This relates to waste disposal and governs matter relating to environmental health services.
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