Sharing ideas: Indranee (right) speaking to media delegates during the Malaysian Journalists’ Visit Programme to Singapore.
SINGAPORE: Having a strong regional power grid is important as the country generating clean energy can then share it with other nations in the zone, says its Minister in the Prime Minister’s Department Indranee Rajah.
She said one example would be the plan to channel hydro power produced by Laos all the way to the island republic in the south via Thailand and Malaysia.
“This is a good pilot project. The clean energy generated can then be shared within the region, which, of course, will pay for it,” she told members of the Malaysian Journalists’ Visit Programme to Singapore recently.
Asked about Sarawak also wanting to produce and sell hydro electric power, Indranee said their minister has been having meetings with his counterpart in the Malaysian state and they are happy to explore Malaysia’s willingness to work with Singapore.
On the development of sustainable infrastructure projects in Asean, Indranee said their government agency, Infrastructure Asia, is tasked with seeing how they could connect the supply and demand for infrastructure in the region.
“We are an infrastructure hub because we are a financial centre, which means that funds come here and funds will be looking for investments and projects.
“One category of assets that funds look at will be infrastructure projects. And being in the region, we can play a role in helping the region; if they have projects, to match them up with the people who have funds, or with the services that are here.
“So Infrastructure Asia’s role is to try and do that matching to assist governments or entities in the region, to match the demand and supply,” Indranee, who oversees Infrastructure Asia, said, adding that the demand and supply for infrastructure is finance.
Noting that financial means is necessary to build a dam, railways or roads, she further said that “project finance, by its definition means that the money is given upfront”.
She added that as the project goes along, it will be self-funding such as water tariffs used to repay the loans while for roads, it will be the toll fees.
She also pointed out that in the past, people would just put in funding for infrastructure but with climate change now, people want sustainable infrastructure.
“So they’re not quite so willing anymore to put money into an infrastructure project unless they are convinced that the project is green.
“Some are not willing to fund those related to coal or fossil fuel, but that also causes a problem because if you do that, the region is not yet at the stage where we have renewable energy and very clean projects,” she said, adding that in many cases the projects still use fossil fuel.
Indranee said the big area being looked at is transition financing, which essentially means to get infrastructure from its fossil fuel into green infrastructure, hence becoming green finance.
“And this is what we call sustainable finance or finance for sustainable infrastructure, which is now a very big thing,” she said, citing solar projects as an example.
She added that because many governments were forced to use their money during the Covid-19 pandemic, many governments now may not have sufficient funds for infrastructure.
“Before, they might just pay themselves but now, they need some other kinds of funding.
“Another will be blended financing – private sector coupled with public sector finance, which then de-risk the project,” she explained.
