Singapore, China Deepen Cooperation On Transition, Adaptation Finance

Singapore and China are expanding cooperation on sustainable finance, including transition activities, climate adaptation, and resilience, as regulators seek to develop financing mechanisms for projects exposed to climate risks.

The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBC) held their fourth annual Singapore-China Green Finance Taskforce meeting in Nanning, China, bringing together more than 50 regulatory and industry participants, MAS said.

The meeting focused on joint initiatives spanning green and transition finance, including efforts to broaden cooperation on taxonomy interoperability beyond mapping green activities to also cover transition activities.

The two sides also discussed encouraging the issuance of green panda bonds and using technology to develop sustainable financing solutions.

The taskforce was established in 2023 to strengthen cooperation between Singapore and China on green and transition finance.

The latest meeting also put greater focus on emerging areas including biodiversity credits, climate-resilience insurance and carbon markets.

Participants examined how insurance solutions could be incorporated into blended finance structures to help mobilise private capital for sustainable projects. They also exchanged views on improving connectivity between carbon markets across borders.

A separate Climate Adaptation and Resilience Roundtable, led by industry participants, examined financing needs for climate-resilient infrastructure and how projects could develop commercially viable revenue models.

The discussions come as governments and financial institutions look beyond emissions reduction toward the financing needs created by physical climate risks, including infrastructure that must withstand more severe climate-related events.

Participants shared approaches to managing physical climate risks and explored ways adaptation and resilience projects could attract commercial financing, MAS said.

“As climate risks transcend borders, closer cooperation on sustainable finance is increasingly important for our economies and financial systems,” said Abigail Ng, MAS chief sustainability officer, who co-chaired the meeting with Wang Xin, director-general of the PBC’s Research Bureau.

The Green Finance Taskforce brings together regulators and industry participants from both jurisdictions through several workstreams aimed at developing practical financing solutions.

For Singapore, deeper cooperation with China also provides a channel for financial institutions and investors to participate in China’s expanding sustainable finance market, while Chinese issuers can access Singapore’s financial ecosystem.

Green panda bonds, which are renminbi-denominated bonds issued by international borrowers in China’s domestic market, were among the financing instruments discussed by the taskforce.

The meeting also highlighted the potential role of technology in sustainable finance, alongside newer financial instruments such as biodiversity credits and insurance-linked solutions for climate adaptation.

The two authorities said they would continue cooperation through the taskforce’s existing workstreams while exploring additional areas where Singapore and China can develop common approaches to sustainable finance.