27 March 2024

Singapore will establish a Future Energy Fund (“Fund”) to support infrastructure investments for the energy transition towards a net zero future. First announced on 16 February 2024 by Singapore Deputy Prime Minister and Minister for Finance Lawrence Wong when he delivered the speech for the Budget Statement for financial year 2024, the Fund will be set up with an initial injection of S$5 billion.

During the Ministry of Trade and Industry (“MTI”) Committee of Supply Debate 2024 on 1 March 2024, Second Minister for Trade and Industry Dr Tan See Leng mentioned that the Fund will be set up within the Energy Market Authority (“EMA”) by the end of 2024 through amendments to relevant legislation. The means by which the financial support may be made available under the Fund was not mentioned and may be expected to be set out in the relevant legislation establishing the Fund. Where multilateral organisations and governments elsewhere had established programmes to support energy transition, the mechanisms employed had included grants, concessional and non-concessional loans, and investments, and guarantees

As mentioned by Minister Tan, the International Renewable Energy Agency has estimated that the world will require an estimated US$150 trillion worth of investments across all energy transition technologies to achieve net zero emissions by 2050.The Fund will ensure that the Government is ready to provide financial support to catalyse energy transition projects to secure low-carbon energy supplies to meet Singapore’s decarbonisation ambitions. Such projects may involve nascent technologies or require high upfront capital expenditures, and furthermore exposed to significant commercial and geopolitical risks.

In its press release of 1 March 2024, EMA gave examples of energy transition infrastructure which could be supported by the Fund such as undersea cables to import low-carbon electricity and new hydrogen terminals and pipelines if Singapore decides to adopt and scale up the use of hydrogen.

Reference materials

The following materials are available on the EMA website www.ema.gov.sg and the MTI website www.mti.gov.sg: