SPEECH BY MR S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY), AT THE 7th ASIA-SINGAPORE INFRASTRUCTURE ROUNDTABLE, TUESDAY, 26 SEPTEMBER 2017, 1.30PM, MARINA BAY SANDS CONVENTION CENTRE
Distinguished Guests,
Ladies and Gentlemen,
Introduction
1. Good afternoon. It is my pleasure to join you today at the 7th Asia-Singapore Infrastructure Roundtable. The significance of Asia’s infrastructure opportunity is reflected in the number and diversity of policy makers, infrastructure companies and financial institutions present here. I am confident that this important roundtable will enable you to establish new collaborations, discover synergies and collectively chart the path forward for infrastructure projects that can meet Asia’s needs.
The next phase of growth in Asia’s infrastructure sector
2. Singapore’s Committee on the Future Economy had identified infrastructure and urban solutions as a key growth cluster offering valuable opportunities for our companies and people. Driven by rapid urbanisation and economic growth, Asia is projected to require US$1.7 trillion of infrastructure investments annually from 2016 to 2030 [1], which is more than double the level in 2009. This presents unparalleled opportunities for companies of all sizes. Beyond the strong fundamentals of this sector, there is also considerable scope to innovate, strengthen partnerships among companies with complementary capabilities, and for governments to help companies access these opportunities.
3. The next phase of Asia’s infrastructure development is not just about meeting the demand for essential facilities, but also ensuring that we develop in a smart and sustainable manner. This involves harnessing technologies, such as urban informatics which uses big data to improve urban solutions, as well as sensors and modelling software to optimise outcomes. It is also important that infrastructure projects be developed with minimal environmental footprint. This will help to create more attractive, liveable cities with sustainable growth. In this context, the theme of ASIR 2017 - “Building smart and sustainable infrastructure for Asia” - is especially pertinent.
Our vibrant infrastructure ecosystem
4. Singapore has developed a strong and vibrant eco-system with key enablers that are necessary to support the development of smart and sustainable infrastructure projects. From advisory services in engineering, financial and legal fields to project development, companies can tap on the deep and broad expertise available in Singapore to structure their regional infrastructure projects. This includes engineering consultancy companies such as CH2M and Meinhardt, as well as law firms like Clifford Chance and Rajah and Tann.
5. For financing, Singapore-based financial institutions, such as DBS Bank, Industrial and Commercial Bank of China and Standard Chartered Bank, have specialised and experienced infrastructure financing teams. Clifford Capital, a local project finance solutions provider, has also supported various projects in Asia and other regions. One example is the first Green Bond backed by a 403 Megawatt portfolio of renewable projects from an Indian issuer and GIC portfolio company, Greenko[2]. Attracted by the vibrancy of the sector, China Construction Bank, has also established an infrastructure project office in Singapore to finance small to medium-sized projects in the region.
6. At the same time, we have built strong partnerships with Multilateral Development Banks (MDBs), such as the World Bank, Asian Development Bank and the Asian Infrastructure Investment Bank. These MDBs offer a wealth of experience in structuring infrastructure projects, and will help to catalyse a pipeline of bankable infrastructure opportunities in the region.
7. We have also developed expertise to support the development of infrastructure projects in the region. Let me illustrate this with a few examples:
a) Later today, Darco, a Singapore water company, and InfraCo Asia, an infrastructure development company headquartered in Singapore, will be signing an MOU to establish a joint venture to co-develop four water projects in Vietnam. One of the projects is in Bai Lai, in Ben Tre province. It is expected to bring clean drinking water to 15,000 households, who currently have no ready access to potable water. For this project, IE Singapore was able to bring together Darco’s technical experience in the water sector, and InfraCo Asia’s project development and financing expertise, to realise the ambition of the companies to own and operate water assets.
b) Another example is in India, where the Government of Andhra Pradesh has recently appointed a Singapore Consortium comprising Ascendas-Singbridge and SembCorp Development to master develop the seed area of Amaravati, the new capital city of the state of Andhra Pradesh. This development entails the use of sustainable and smart city technologies and will attract residents, developers and investments to transform Amaravati into a smart and sustainable city of the future.
Deepening support for companies in the infrastructure sector
8. Beyond the capabilities which I have highlighted, there is scope to deepen our facilitation to bring companies in the infrastructure sector together, thereby strengthening our collective ability to access regional opportunities. To sharpen our competitive edge, the government has put in place several initiatives to strengthen our support for companies in the infrastructure sector. Let me touch on a few.
9. First, the government will provide more comprehensive and integrated support to our companies through the newly formed Enterprise Singapore. Established through the merger of IE Singapore and SPRING Singapore, the new agency will bring together and build on IE Singapore’s in-market networks and knowledge, and SPRING Singapore’s strengths in capability development.
10. Enterprise Singapore will continue IE Singapore’s ongoing efforts to bring together companies with complementary capabilities. Given the large and complex nature of infrastructure projects, Enterprise Singapore can help to identify and connect our larger, more established players with SMEs, whose capabilities and services are known to SPRING, to provide a comprehensive infrastructure solution. This, in addition to a stronger Singapore industry branding, will help our companies submit more compelling bids.
11. Second, we will be enhancing the Internationalisation Finance Scheme, or IFS in short, to help our companies’ gain better access to competitive financing solutions for overseas projects. Singapore-based infrastructure companies can look forward to the new IFS Sovereign Cover scheme, which will provide insurance coverage for loans for infrastructure projects in developing countries of a higher risk profile. This will enable our companies to pursue a larger pool of infrastructure projects through better access to more financing options.
12. In addition, we will also be rolling out the IFS Non-Recourse Financing scheme to better help our SMEs scale up. Under the scheme, IE Singapore will co-share the default risks of loans secured only by the project’s assets or cash flows provided by participating financial institutions to SMEs, for projects in the post-construction phase. In doing so, we hope to encourage financial institutions to provide infrastructure financing loans to SMEs without requiring the company’s assets as collateral or a personal guarantee from the SME owners. This will enable SMEs, with their relatively smaller financial base, to take on multiple projects at a time and thus build up deeper expertise in the field.
13. Third, we will develop a talent pool of Singaporeans with deep skills in project development expertise that can anchor regional projects. Today, I am pleased to announce the launch of the Professional Conversion Programme (PCP) for Global Ready Infrastructure Talent (GRIT). Through partnerships with both local enterprises and MNCs based in Singapore, the programme will equip individuals with project development skills through on-the-job training, and help nurture a pipeline of local talent who can better support our companies’ overseas infrastructure projects. Participants of the PCP for GRIT can also expect to gain exposure to international or regional projects for a substantial part of their training process.
14.
I am happy to note that since
the soft launch of the programme as a pilot in the second quarter of 2017, we
have seen participation from 12 companies who have already committed to take in
30 PMET candidates under the PCP for GRIT. An example of a participant in the PCP is Mr
Liang Dong Tzy, who was previously involved in business development in the food
and beverage industry. Through the PCP,
he is now emplaced and undergoing training with Yamato Technologies Pte Ltd, a
local water treatment SME. His training
will help him to gain the requisite technical and financial skills for
developing water treatment plant projects in Vietnam. I believe the PCP will benefit many of our
companies and Singaporeans, and welcome many more companies and individuals to step
forward and sign up with the programme.
Conclusion
15. In closing, I would like to thank all of you for your support and participation at this roundtable. I am confident that Singapore can offer you the right partners and ecosystem to structure your infrastructure projects and tap on regional growth opportunities.
16. On that note, I wish everyone a fruitful day ahead. Thank you.