Singapore Announces Greater Project Financing Support

April 23, 2018

During the recent Budget Statement for 2018, Singapore’s Ministry of Finance announced the creation of an Infrastructure Office to be established by Enterprise Singapore and the Monetary Authority of Singapore. The Infrastructure Office is intended to connect stakeholders, enable information exchange on infrastructure opportunities in Asia, facilitate infrastructure investments and financing, and help infrastructure players such as professional service providers access these opportunities.

Generally, project finance is a form of “limited-recourse finance” in which the financiers for the project are repaid principally out of the asset being financed and its revenues. Conversely, the sponsors for a project typically do not have to consolidate the project’s debt onto their own balance sheets. This helps insulate the sponsors from both project debt and potential project failure. However, project finance is generally costlier and involves considerably more management time to implement than other forms of corporate funding.

Infrastructure Gap and the Growth of a Diversified Capital Pool

Senior Minister of State Indranee Rajah S.C. stated during the Committee of Supply Debate 2018 that an estimated $26 trillion may be spent on infrastructure projects in Asia. But these projects are unable to obtain financing “due to lack of bankability, usually occasioned by the lack of proper project preparation, project structuring and technical issues.”

Singapore is well placed to fill this gap in project financing in Asia. As noted by the senior minister of state, Singapore has numerous commercial banks with project finance teams and project structuring expertise. Some of these banks already are Participating Financial Institutions (PFIs) recognized by IE Singapore’s Internationalization Finance Scheme (IFS). The IFS helps Singapore-based companies expanding abroad to obtain financing by sharing the risk of default between IE Singapore and the PFIs, which provides the financing facility.

Clifford Capital—established in 2012 by the Singapore government but managed as an independent, commercially managed company—also is helping to fill the gap. Clifford Capital offers competitive and bespoke project finance, asset-backed, and other structured debt financing solutions for eligible Singapore-based companies in support of their overseas investments or exports involving the infrastructure, offshore marine, and shipping sectors. Because it is not a bank and thus not subject to regulatory restrictions on bank lending, Clifford Capital is more flexible in providing financing solutions.

Multilateral development banks such as the World Bank and its sister agencies also have a significant presence in Singapore. In addition, Singapore has professional services firms, including law firms, that offer infrastructure finance and project structuring expertise; accountancy firms with project advisory teams; and engineering consultancies.

Due to the massive infrastructure gap in Asia, many countries do not have sufficient public sector capital to invest in much-needed new infrastructure to support their growing economies, or even to operate and maintain existing infrastructure. The challenge, especially for growing economies, is to effectively identify projects that require project support from those that are commercially viable enough to attract private sector financing in projects procured on a public-private partnership (PPP) basis. As PPP projects often are more complex and difficult to structure and procure than traditional modes of procurement, several Association of Southeast Asian Nations (ASEAN) countries are currently developing PPP regulatory legal frameworks to govern PPP procurement.


With the creation of the Infrastructure Office, we foresee even greater opportunities for the Singapore government, financiers, and multilateral agencies to collaborate on new structures and instruments that reduce risk and boost incentives for infrastructure financing. We are hopeful that this initiative will improve the bankability of projects and galvanize the technical expertise required for successful project financings.