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Questioning the long-term debt burden of Singapore’s 20-year green bond

Published July 25, 2026 at 8:02 AM UTC

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While Singapore’s latest green bond attracted strong demand, the 2.4% coupon for a 20-year instrument warrants scrutiny. At a time when the government has ample reserves and surplus revenue, taking on multi-billion dollar long-term debt may not be the most cost-efficient option. The 2.4% rate is higher than the 10-year green bond issued in 2022, which had a coupon of 1.8%, reflecting higher interest rate risk. Over 20 years, total interest payments on S$2.6 billion will exceed S$1.2 billion, a cost ultimately borne by taxpayers. Moreover, the definition of 'green' projects remains broad, and oversight of how proceeds are deployed is critical. If projects deliver lower environmental benefits than expected, the debt could become a financial burden without proportional climate gains. Critics note that Singapore could instead use existing budget surpluses or leverage cheaper loans from multilateral banks. The bond also adds to the government’s overall debt stock, even if ring-fenced for green spending. As interest rates may stay higher for longer, this long-term commitment could prove expensive if refinancing needs arise. A more gradual, shorter-dated approach might reduce debt costs while still accelerating green investments.