Singapore: Southeast Asia’s Financial Destination

By Ben Carrozzi

Ben Carrozzi, an energy transition and low carbon infrastructure specialist at Norton Rose Fulbright, explains why the Lion City remains a critical player in global trade and logistics. From investing in a new mega port to establishing an offshore wind hub without installing a single turbine in its waters, Singapore is pushing boundaries and becoming an increasingly important hub for the project cargo community.

From Issue 3, 2025 of Breakbulk Magazine.

(6-minute read)

Thanks to its strategic location and world-class infrastructure, Singapore acts as a vital conduit between the developed West and the aggressively expanding economies of the East. Over the past 50 years, the city-state has grown from a humble trading port to a pivotal hub for the maritime, logistics and energy sectors.

Today, Singapore boasts some of the most sophisticated port facilities globally, a dynamic energy landscape and a thriving tech industry. As nations adapt to the evolving geopolitical landscape, Singapore’s influence in shaping the future of both regional and global supply chains is poised to grow.

Singapore’s rise to prominence can be traced back to the British colonial era of the 19th century when the country - despite producing no oil of its own - became a vital port for oil trading due to its strategic location at the southern tip of the Strait of Malacca. After gaining independence in 1965, Singapore compensated for its limited natural resources by investing heavily in infrastructure and technology to gain legitimacy as a global oil refining and trading center, providing high-quality bunkering, oil pricing and associated value-added services.

It was a strategy that reaped significant rewards. Today, Jurong Island holds the title as the world’s largest bunkering port and Singapore serves as a vital transshipment point for energy commodities such as crude oil, liquefied natural gas (LNG), and refined products.

As the world moves towards renewable sources, Singapore is deploying this same strategy to reposition itself as a regional hub for Southeast Asia’s (SEA) growing renewables industry. The city-state’s lack of indigenous resources and small land mass have led to it being deemed a “renewable-disadvantaged nation”, presenting an obvious challenge to the government as it strives to meet its Paris Agreement commitments and achieve net-zero emissions by 2050.

However, the old ethos of focusing on what the country has to offer and developing that to its fullest potential remains. By providing a home for capital and professional services alike, acting as a trusted broker in annual COP negotiations, initiating several innovative projects and operating as a reliable middleman in the regional distribution of renewables, Singapore is going beyond decarbonization at home to reconfigure itself as a critical renewable energy hub.

Growing Energy Needs

Driven by continued economic expansion, significant population growth and its status as a global center for cross-industry innovation, Singapore’s energy needs have grown significantly in recent decades. In particular, the rapid growth of data centers in Singapore has added significant strain to the nation’s energy grid.

As of this year, Singapore’s data centers consume nearly 7% of the nation’s power usage, a figure projected to reach 12% by 2030. The government is therefore facing pressing challenges as it attempts to balance the increasing digitalization of its economy with its ambitious environmental commitments.

Traditionally, Singapore’s energy mix has been heavily reliant on natural gas. In order to continue supporting rapid economic expansion and realize its transition to renewable power, the government recognizes the need to invest heavily in energy diversification projects.

Given Singapore’s limited domestic assets, its reliance on renewable energy imports to meet emission targets and ever-increasing energy demands is accelerating SEA’s energy transition. While countries in the region have historically lagged Europe in terms of transition progress and clean energy investment, by forging essential cross-border partnerships, Singapore is providing the necessary incentives and critical financial support to its neighbors to expedite the development of renewables projects across the region.

Singapore’s Energy Market Authority (EMA) is looking to import approximately 6 gigawatts (GW) of low-carbon power by 2035 via investment in a range of projects. One of the key Singapore-led initiatives is the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP).

Launched in 2022, LTMS-PIP marked the first multinational cross-border trade of renewable electricity in SEA. By leveraging existing infrastructure in Thailand and Malaysia, the project currently enables Laos to export up to 100 megawatts (MW) of hydropower to Singapore, with a second phase planned to expand capacity further by incorporating additional supply from Malaysia.

Looking east, the EMA has also granted conditional licenses to five Indonesia-based projects for the importation of 2 GW of low-carbon electricity, with a further two projects granted conditional approvals to import an additional 1.4 GW.

The reciprocal benefits of such cross-border agreements are clear: while Singapore achieves greater energy diversification and security of supply, its resource-rich neighbors are provided critical financial support for their burgeoning renewables industries and benefit from strengthened supply chains.

Hydrogen-Ready Projects

To avoid an over-reliance on imports, Singapore is also focused on the development of several Hydrogen- Ready Combined Cycle Gas Turbine (CCGT) projects, which it hopes will play a key role in meeting its transition targets. While existing plants use both gas and steam turbines to generate electricity, these new plants will have the capacity to gradually incorporate hydrogen into the fuel mix, eventually enabling the plants to operate entirely on hydrogen in the future.

The first of these projects, Keppel’s 600 MW Sakra Cogen Plant on Jurong Island, broke ground in November 2024 and is expected to be operational in the first quarter of 2026, with the capacity to power around 864,000 homes per year. On Keppel’s heels is PacificLight Power, which has recently been awarded the right to build a second hydrogen-ready CCGT on Jurong Island, with the company expected to generate nearly 10% of Singapore’s future annual energy needs.

For Singapore to meet its 2030 targets, the development of such projects is critical to bridging the gap between Singapore’s existing natural gas infrastructure and the government’s push to decarbonize.

Looking beyond project investment, Singapore’s role as a regional leader in the energy transition is anchored by its innovative green finance market. SEA is now at a critical point in its development of renewables; to achieve net zero targets, the region needs to triple its renewable energy capacity by 2030, which requires annualized investments to triple to US$2.3 trillion over the next six years. In response, Singapore is mobilizing its existing capabilities as an international finance hub to build a comprehensive green financing ecosystem ready to fund the development of Asia’s renewable landscape.

Launched in 2019 by the Monetary Authority of Singapore, the Green Finance Action Plan has positioned Singapore as a leader in green financing. Originally focused on developing green finance markets and fostering green FinTech innovation, the plan – since renamed the Finance for Net Zero Action Plan – has been expanded to include transition finance in a bid to accelerate the nation’s decarbonization efforts.

Green Finance Strategy

However, Singapore’s green bond market is the real engine of its green finance strategy. The Singapore Green Bond Framework governs the issuance of renewable bonds to finance sustainable infrastructure projects, including data centers which meet green construction standards. To catalyze the transition to renewable power both regionally and globally, the government has committed to issuing up to S$35 billion (US$26 billion) of green government bonds by 2030, engendering liquidity and laying the foundations for greater private sector finance activity, which can then be leveraged to fund regional renewables projects.

The Financing Asia’s Transition Partnership (FAST-P) is another significant initiative led by Singapore. Supported by a network of public, private and philanthropic partners, this blended finance project aims to inject up to US$5 billion to finance and stabilize green projects across Asia. FAST-P focuses its resources on initiatives with the greatest regional utility, such as accelerating the transition from coal power and securing the grid.

By providing significant financial support for projects of this kind, Singapore is not only facilitating its own decarbonization, but that of the region, while simultaneously assisting the economic and environmental resilience of its neighbors. In addition to its role as a green financing hub, Singapore is the regional headquarters of many multinational companies spanning the clean energy value chain, ranging from investors and think tanks, to international financial institutions, accountants, law firms and other professional advisers adept at advising prospective investors on the regulatory environment and operational risks of engaging in ASEAN’s developing renewables sector.

Global Maritime Hub

Energy is not the only sector undergoing rapid transformation in Singapore - the maritime industry is also reaping the benefits of the city-state’s advancement. In 2024, Singapore’s port registered a new record of 3.11 billion gross tons in arriving ship traffic. In addition, the completion of the Tuas Mega Port is expected to take place by 2040 and is set to be the world’s largest fully automated terminal.

The new port will streamline operations with onsite consolidated container handling which will improve efficiency and vessel turnaround times. The Maritime and Port Authority of Singapore (MPA) is optimistic that the new terminal will result in greater economies of scale, optimize the deployment of resources for port and marine services by automating both wharf-side and yard operations, and reduce the need for inter-terminal haulage.

As you would expect, Tuas Mega Port will be automated and digitalized. Some key features of the new Tuas Mega Port include the use of blockchain technology and artificial intelligence to optimize vessel traffic management and cargo handling. The automation of cranes and vehicles will facilitate the reduction of reliance on manual labor and increase efficiency within the port.

It is clear that the shipping industry constitutes a major segment of Singapore’s economy, contributing to roughly 7% of Singapore’s GDP. Implementation of several tax incentive schemes and the prioritization of innovation and technology in this sector has enhanced the island state’s competitive edge and contributed to its status as a global maritime hub, according to multiple global surveys.

Special incentives are awarded by the MPA for the purpose of attracting shipping conglomerates to operate from Singapore and supporting the ownership and management of ships from Singapore.

Among other available incentives, the Maritime Sector Incentive offers full corporate tax exemption on shipping income derived from freight and charters of ships registered with the Singapore Registry of Ship. These tax exemptions extend to gains derived from the sale of Singapore-flagged ships and the process of obtaining these tax exemptions have been made simple by the automatic exemption of Singapore-flagged ships to taxation.

Additionally, the Approved Shipping Financing Arrangement award also provides support for ship owners and operators by way of withholding tax exemptions on qualifying financing arrangements for the purpose of financing the purchase and construction of vessels.

One notable and more recent development is the identification of the country’s potential to combine its leadership in the energy, maritime and shipping sectors to facilitate the development of even newer markets. In particular, we refer to Enterprise Singapore’s plans for Singapore to become an offshore wind hub – without ever installing a turbine in its territorial waters.

Instead, the plan is to mobilize the country’s maritime industrial base, along with excellence in advanced engineering applications, and combine them with the physical and intellectual capital that already resides in Singapore to support the development of offshore wind projects globally.

Ambitious projects of this kind once again demonstrate Singapore’s outward-looking strategy and its ability to engender international and cross-industry collaboration to respond to the ever-evolving needs of the modern world.

Top photo: SAL Heavy Lift's MV Regine carries project cargo in Singapore waters. CREDIT: SAL Heavy Lift
Second and Third: MSC ships 390-tonne hydraulic hammer from Rotterdam to Singapore. Credit: MSC