How private capital can power Singapore’s sustainable future

Learn about the opportunities for private capital to enable Singapore’s sustainable future.

7 August 2025

6 mins

Corporate & investment bankingGlobal bankingPower utilities and heavy industries

Singapore is forging a path towards a more sustainable future. The market is doing this through investment in clean energy, including the establishment of a SG$10 billion Future Energy Fund. In addition, Singapore has put in place robust reporting standards and was recently recognised in a report by KPMG for its leadership on ESG reporting standards.

Singapore’s Green Plan 2030 is at the heart of this approach. The plan, launched in 2021, sets out a comprehensive strategy built on five pillars—City in Nature, Energy Reset, Sustainable Living, Green Economy and Resilient Future—to accelerate sustainable development and the energy transition.

Private capital has a role to play in supporting this shift, with investments needed to scale renewable energy production such as hydropower and solar. The market is also positioning itself a centre for sustainable finance, making it an attractive destination for private capital.

Navigating overlapping challenges

Despite this ambition, Singapore faces several challenges when considering the energy transition. For example, achieving the critical medium-term goal of securing the importation of 6GW of renewable energy by 2035, will require overcoming hurdles such as:

• Geopolitics: Land supply limitations mean that solar power grids, for instance, cannot provide more than 10 per cent of what Singapore will need by 2050, and land to accommodate wind-power installations is similarly limited. Consequently, Singapore must import renewable electricity while ensuring a diversity of supply for energy security reasons.
• Technical issues: The ASEAN Power Grid lacks capacity and struggles to balance competing national interests. An additional technical shortfall is a lack of skills in the region, while sourcing cables that transmit energy across long distances adds further complexity.
• Regulatory issues: Greater inter-governmental cooperation is essential to create frameworks for cross-border trade and to recognise renewable energy certificates (RECs)—though, as we shall see, positive steps are underway in this regard.
• Financial barriers: Investment costs in the region are high—at present, renewables require far higher investment per GW than fossil fuel projects—and the scale of Singapore’s effort means commercial banks, though keen to be involved, cannot fully fund the capital needed alone; consequently, projects need support from export credit agencies and private capital.

Clean energy in Singapore: A scarce asset in a prized location

While speaking at a panel discussion on Powering Singapore’s Sustainable Future at an industry event in March 2025, Rajesh Singhi, Global Head, CleanTech & Environment M&A, Standard Chartered, noted that while banks play a critical role in financing these projects, they also face challenges. These include long project lead times, uncertainty about the identities of the off-takers, duration of power purchase agreements (PPAs) and any backup plans in case customers drop out.

The fact that ASEAN has not yet completed sizeable renewable energy projects is evidence of the challenges faced. However, says Singhi, there are three reasons why ASEAN cross-border energy projects constitute an attractive proposition for investors.

First, clean energy is a scarce asset class in ASEAN. The region is poised for major energy demand growth and will account for almost one-quarter of the world’s incremental power demand by 2035. Currently, 80% of the region’s power is derived from fossil fuels, so the shift away from conventional power also creates a large investment opportunity for clean energy developers.

Second, such projects offer attractive returns as they require significant expertise due to the complexities described earlier. Consequently, developers with the expertise to execute such projects can generate above-average returns compared to more traditional renewable energy assets.

“Third, within a still-developing ASEAN, Singapore is the only triple A-rated market,” says Singhi. “And because Singapore is smaller relative to other countries in the region, these assets are extremely rare—so, once an asset of this scale comes through, we feel confident that investors would be highly interested.”

Opportunities for Private Capital

Solving the array of challenges offers opportunities for private capital to support Singapore’s various sustainability initiatives.

Scaling up the region’s grid infrastructure, for instance, could prove highly attractive to investors as this would boost the distribution of renewables and hedge the intermittent production of energy inherent to renewables. It would also overcome the region’s uneven distribution of renewable resources and, according to a recent US-Singapore report, could help attract up to US$2bn in research and development (R&D) investments each year and potentially create up to 9,000 jobs annually.

Additionally, bearing in mind that over half of Singaporean businesses plan to invest in solar energy by 2030, and given the Monetary Authority of Singapore’s Sustainable Bond Grant Scheme and Sustainable Loan Grant Scheme encourages companies to pursue sustainable financing, there are ample opportunities for private investors to drive economic returns and environmental impact.

Indeed, private equity players are increasingly stepping in to plug ASEAN’s sustainable finance gap with banks like Standard Chartered facilitating green loans to fund renewable energy projects across the region.

Singapore is also collaborating with countries and organisations in the region to create a framework that would recognise RECs tied to trading in cross‑border electricity. Such a framework should boost demand for electricity trading projects and drive investment in cross‑border renewable energy projects.

All this, combined with a greater regional focus on generating sustainable energy, is set to create a future in which ASEAN’s cross-border energy projects become increasingly attractive—with access to a scarce yet premium asset in a growing market, and the potential to generate above-average returns from its energy transition.

Chow Wan Thonh, Head of Coverage, Standard Chartered Singapore and ASEAN, the transition to a more sustainable economy is, “more than a distant goal—it is a shared responsibility that calls for immediate action and for investors, the energy transition not only requires innovative solutions—it needs far more sources of sustainable energy to power this fast-growing region,” she says.

“That, in turn, is bringing unparalleled opportunities for investors to co-create a future where the environmental, social and economic factors are fully intertwined.”

This article is based on a panel discussion on Powering Singapore’s Sustainable Future at an industry event in March 2025.