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Infrastructure & PPPs in Singapore, Laos and Cambodia - Q4 2023 Update

YOG INFRA Q4 2023 insights

We see very encouraging developments in infrastructure developments across SINGAPORE, LAOS and CAMBODIA, with a strong impetus to clean energy transition, E-mobility and Transport & Logistics sectors. SINGAPORE is taking noteworthy steps to promote e-vehicles in private and public transport to meet its NetZero targets. LAOS continues to see international investments, bilateral partnerships with neighbouring countries such as Vietnam and Thailand, in developing the transport & logistics sector. CAMBODIA is implementing previously annouced projects in clean energy and urban infra sectors.

Read the latest developments in Infrastructure and PPPs in the three countries in our latst insight.

 

Singapore

SEMBCORP SIGNS 100 MW POWER OFFTAKE DEAL

A unit of Singapore's Sembcorp Industries has signed an offtake deal to supply up to 100 MW power to ST Telemedia Global Data Centres (STT GDC). The Temasek-backed data centre developer will use the electricity generated by Sembcorp Power for its facilities in Singapore. The power purchase agreement is for a contract period of between 8 and 10 years. 

SGX-listed Sembcorp, a global power and infrastructure company, owns a total energy portfolio of more than 14 GW, with 7.1 GW of that renewable energy - including solar, wind and energy storage globally. It agreed a PPA worth SGD 180 Mn (USD 132 Mn) with Singtel Telecommunications (Singtel) for an undisclosed capacity.  The company has also been looking to expand its clean energy portfolio as part of Sembcorp's brown-to-green transformation strategy. where it is seeking to invest more than USD 4 Bn in sustainable infrastructure through 2025 and grow renewables capacity to about 10 GW by then, from more than 7 GW.

 

SINGAPORE TO CENTRALIZE GAS PROCUREMENT 

Singapore's Ministry of Trade and Industry (MTI) and the Energy Market Authority (EMA) will be introducing changes to the gas procurement framework for the power sector. MTI and EMA will establish an entity (Gasco) that will centralize the procurement and supply of gas for the power sector by aggregating gas demand from the power generation companies (gencos). 

When implemented, this centralized procurement approach will apply to all future gas demand from the power sector, including gas contract renewals. Gencos will be allowed to continue with the existing gas supply contracts they have with their respective gas suppliers. Other industrial gas customers can continue to procure gas through licensed gas importers and will not be subject to this central procurement framework. The EMA intends to set up Gasco in 2024.

 

INDONESIA AND SINGAPORE SIGN MOU ON RENEWABLE ENERGY COOPERATION 

An Indonesian renewable energy firm is set to commence the construction of solar power plants valued at USD 9 Bn (equivalent to SGD 12.3 Bn) on an island near Batam starting in 2024. Their goal is to supply Singapore with low-carbon electricity by 2027. In an agreement signed, Marubeni Global Indonesia (MGI) committed to delivering 600 megawatts (MW) of electricity to Tuas Power, Singapore’s top power generation company. Tuas Power intends to submit a proposal to Singapore’s Energy Market Authority (EMA) to import this electricity, which will be sufficient to power approximately 730,000 households. 

The first phase of construction is scheduled to commence in March 2024 on Galang Island, located south of Batam and part of the Riau Islands province. The initial solar farm will have a capacity of 2.55 gigawatt-peak (GWp) and will include a 7 GWp battery-energy storage system. The second phase of the project is expected to begin after the first solar farm becomes operational in 2027 and will be situated on 9 less-populated or uninhabited islands near Batam.

 

CONSORTIUM EXPLORING AMMONIA RETROFIT TO GE GAS TURBINES IN SINGAPORE 

Singapore-based Sembcorp Industries, GE Vernova, and Japanese heavy industry firm IHI Corp. will jointly examine potentially retrofitting two GE 9F gas turbines at an 815-MW gas-fired combined cycle power plant in Singapore with ammonia capabilities. The companies revealed they signed a non-binding memorandum of understanding (MoU) to assess ammonia combustion capabilities at the Sembcorp’s Sakra power plant. The cogeneration plant in Pulau Sakra on Jurong Island, southwest Singapore, which opened in November 2001, produces power for the grid and process steam for chemical and petrochemical facilities nearby.

 

SINGAPORE EXPANDS GREEN CORRIDOR NETWORK TO 6 JAPAN PORTS 

The Ministry of Transport of the Republic of Singapore (MOT) and the Ministry of Land, Infrastructure, Transport and Tourism of Japan (MLIT) signed a memorandum of cooperation (MoC) to establish the Singapore – Japan Green and Digital Shipping Corridor. With the establishment of the Green and Digital Shipping Corridor, Maritime and Port Authority (MPA) and Japanese port partners aim to embark on pilot projects and trials for alternative marine fuels such as ammonia and hydrogen. The two countries will also collaborate on developing the necessary bunkering infrastructure, standards, and training. Additionally, they will encourage the development and adoption of technologies to decarbonize port infrastructure. 

Under this milestone collaboration, the Maritime and Port Authority of Singapore will work together with six Japanese ports—namely, the Port of Tokyo, Port of Yokohama, and Port of Kawasaki supporting the Kanto Region; the Port of Osaka and the Port of Kobe supporting the Kansai Region; and the Port of Nagoya supporting the Chubu Region.

 

SINGAPORE CALLS FOR PROPOSALS FOR METHANOL BUNKER NETWORK BY 2025 

The Maritime and Port Authority of Singapore (MPA) is taking steps to further build out the infrastructure required to support the widespread adoption of methanol as a marine fuel. It has released a call for proposals for the implementation of end-to-end methanol bunkering solutions following the launch of the port’s first dedicated methanol bunker vessel and efforts to develop the protocols for the new fuel. 

In launching the effort to obtain proposals for the bunkering operations, the MPA cites the expected delivery of newly-built methanol-capable vessels in the coming years. The container segment has been moving forward aggressively with orders for dual-fuel methanol-capable vessels. While LNG remains the most favored option, experts have predicted that methanol will overtake other options due to its increasing availability and the planned production of green methanol, as well as the relative ease in handling the fuel versus LNG or ammonia. To ensure a resilient supply of methanol to meet the international bunkering needs in the Port of Singapore, the MPA is inviting interested parties to submit proposals for the supply of methanol as a marine bunker fuel.

 

SINGAPORE, LTA AWARDED 360 E-BUSES TO BYD AND ZHONGTONG 

Singapore has awarded 2 contracts to procure a total of 360 electric buses (with option for further 60 vehicles) and another 2 contracts for the deployment of charging systems in bus depots at Sengkang West, East Coast and Gali Batu. The vehicles will be deployed starting from December 2024. Charging systems will also be installed at the bus depots progressively from December 2024. The country will only buy electric or hybrid buses from 2024 onwards and by 2030, electric buses are expected to make up half of the public bus fleet.

 

HYUNDAI TO ESTABLISH HYDROGEN MOBILITY INFRASTRUCTURE IN SINGAPORE 

Hyundai auto group, the world's third-largest carmaker, has partnered with Singaporean logistics company PTCL to establish hydrogen mobility infrastructure in Singapore. The island country aims to increase the proportion of low-carbon energy such as hydrogen to half of its electricity production by 2050. 

According to data released by Singapore-based think tank Asia Natural Gas and Energy Association, the Southeast Asian country currently relies on natural gas for 96 percent of its electricity generation, with the majority being imported from overseas. Hyundai Motor secures technology for hydrogen vehicles and hydrogen fuel systems. The company can also produce the clean fuel using food biogas. 

 

SERAYA PARTNERS CLOSES USD 800 MN APAC DIGITAL INFRASTRUCTURE AND ENERGY TRANSITION FUND 

Singapore-based Seraya Partners has closed an USD 800 Mn fund dedicated to digital infrastructure and energy transition investments. The funding round is the private equity company's first and surpassed its USD 750 Mn target. The mid-market fund will be focused on Asia and will be used to invest in the region's energy transition and digital infrastructure. Half of the fund has already been dedicated to 3 companies: data center operator Empyrion DC, offshore wind vessel operator Cyan Renewables, and solar, wind, and energy storage company Astrid Renew. 

The fund has been contributed to by a variety of investors, including sovereign wealth funds, pension funds, insurers, and family offices across North America, Europe, and Asia Pacific, including the Asian Infrastructure Investment Bank (AIIB), Alberta Investment Management Company (AIMCo), and funds managed by BlackRock.

 

MAS, TEMASEK INK MOU TO ADDRESS REGION’S SUSTAINABLE INFRASTRUCTURE FINANCING GAP 

THE Monetary Authority of Singapore (MAS) and Temasek have signed a memorandum of understanding with Allied Climate Partners (ACP) and the World Bank’s International Finance Corporation (IFC) to address the financing gap for Asia’s sustainable development needs. This will be done through the deployment of blended finance, mixing both concessional capital from the philanthropic and public sectors, as well as private capital towards such projects. 

The group will also identify and develop a pipeline of investments in sectors including renewable energy and storage development, electric vehicle infrastructure, sustainable transportation, and water and waste management. This will help to address climate finance gaps and increase the bankability of green and sustainable projects in Asia, with an initial focus on South-east Asia.

 

UNION GAS SIGNS MOU TO DEVELOP EV CHARGING INFRASTRUCTURE IN SINGAPORE, JAPAN AND SOUTHEAST ASIA 

Fuel products provider Union Gas Holdings 1F2 has announced a memorandum of understanding (MOU) with Deltrix Limited to accelerate and strengthen the development of electric vehicle (EV) charging infrastructure across Singapore, Japan and the Southeast Asia region. The MOU expresses the intention of Union Gas and Deltrix to co-operate on areas including EV charging infrastructure and systems development in the target markets. 

Deltrix is a subsidiary of Hong Kong-listed Trio Industrial Electronics Group and a leading manufacturer and provider of integrated EV charging integration solutions and ecosystems in Hong Kong. The partnership will enhance knowledge sharing and enable both companies to tap on each other’s capabilities, resources and networks to capture the market for EV charging solutions. Deltrix will bring to the table its expertise in developing such infrastructure while Union Gas will contribute its extensive customer base and network that have been established through more than 40 years of supplying energy products.

 

KEPPEL, NUS LAUNCH PROJECT TO CREATE INFRASTRUCTURE NETWORK THAT REDUCES ENERGY CONSUMPTION 

Keppel Corp, through the group’s infrastructure division, has launched a multi-pronged project for the National University of Singapore (NUS) to create a network that reduces energy consumption. The project aims to be scaled across the entire NUS campus in different phases, and eventually be replicated for third-party customers locally and abroad. 

It follows a master research collaboration agreement signed between Keppel and NUS in April 2022. Under the agreement, NUS’ Kent Ridge campus will serve as a “low-carbon living laboratory” to create, test-bed and scale commercially viable climate technologies and sustainability-related innovation. Keppel and NUS will implement a digital twin – a digital representation of a physical object – for this project using comprehensive sensing technologies and modelling. 

 

Laos

THAILAND PLEDGES HELP TO DEVELOP INFRASTRUCTURE PROJECTS IN LAOS

Thailand has agreed to assist Laos in achieving its plan to transform from a land-locked to a land-linked country, providing support for the development of infrastructure projects and securing low-interest loans. The Thai prime minister expressed his support for economic cooperation between Thailand and Laos, aiming to turn Laos and Thailand’s north-eastern region into a growth area for mutual benefit. Both sides have agreed to facilitate bilateral trade, targeting approximately USD 11 Bn annually within the next 2 years.

In relation to the rail connection between Thailand and Laos, there is a call to expedite discussions on the construction of a new bridge across the Mekong River, connecting Thailand’s Nong Khai with the Laotian capital. Both countries have also agreed to build the 6th Friendship Bridge, linking Ubon Ratchathani with Salavan in Laos, and to develop Highway 12, linking Nakhon Phanom with Thakhek, Bolikhamsai, and Quang Binh province in Vietnam.

 

LAOS-VIETNAM RAILWAY PROJECT OFFICIALLY APPROVED; NEW ROUTE TO ELEVATE TRADE AND TOURISM BETWEEN TWO COUNTRIES 

A new railway project between Laos and Vietnam has been approved. The train will establish a direct link between the countries and aim to become a primary source of economic and infrastructure development in the region. The project is part of the Vientiane-Vung Ang railway development plan for 2021–2030, with a vision towards 2050. It is a joint venture between Vietnam’s Deo Ca Group JSC and Petroleum Trading Lao Public Company (PTL) that will be developed under the form of a public-private partnership (PPP). 

Covering a length of 103 Km from Vung Ang-Tan Ap-Mu Gia, the first section of the railway is estimated to cost nearly VND 27.5 Trn (approximately USD 1.12 Bn). The project is expected to be operational in early 2027. As part of the Vientiane-Vung Ang railway, this project will play a vital role in connecting Laos to regional maritime trade, enhancing economic ties with Vietnam, and targeting markets in China, South Korea, and Japan.

 

THAI CLEAN ENERGY FIRM RONITRON AND LAOS’ AIF GROUP COLLABORATE ON USD 100 BN GREEN HYDROGEN PROJECT 

Ronitron, a well-known Thai clean energy developer, has officially entered into a memorandum of understanding (MOU) with AIF Group, a prominent business conglomerate in Laos. This strategic partnership aims to collaborate on a Green Hydrogen production project valued at over 100 Bn baht. The project will utilize advanced Solid Oxide Electrolyzer Cell (SOEC) technology in conjunction with renewable energy sources. 

Ronitron is committed to becoming a global provider of green energy and is at the forefront of using the latest SOEC technology, along with cost-effective green energy solutions. The company recognizes the crucial role of green energy in helping manufacturers and power producers achieve their Carbon Neutrality and Net Zero Emission goals. To enhance the value of its green energy projects, Ronitron is partnering with the Fintechinno Group of Companies to develop a robust Carbon Credit Management System. This strategic move positions Ronitron as a potential leader and “EnergyTech Unicorn” in the green energy supply sector across Asia.

 

LAOS, CAMBODIA BOOST INFRASTRUCTURE, TRADE TIES 

Cambodia has been requested to consider enhancing infrastructure connectivity and improving transport corridors by the Lao ministry of public works and transport. The effort aims to further enhance the flow of goods and tourism between the two countries. The proposal was put forward at a bilateral working meeting in Laos between Cambodian public works minister and his Lao counterpart. 

The proposal aims to improve and contribute to economic, social and cultural development within both bilateral and regional frameworks. The Cambodian Chamber of Commerce (CCC) stated that bilateral trade volume between the two countries increased from USD 160 Mn in 2021 to USD 210 Mn in 2022.

 

Cambodia

CAMBODIA’S CDC UNVEILS USD 50 BN LOGISTICS INITIATIVE

Cambodian deputy prime minister announced a comprehensive USD 50 Bn master plan for the country’s transport and logistics sectors comprising 174 projects. The Council for the Development of Cambodia (CDC) made the announcement at the China-Cambodia Cooperation Forum 2023 held in Shenzhen. The forum was organised by the Global Logistics Alliance, a network of over 5,000 carriers from more than 170 countries.

China and Cambodia have chalked out an action plan for building a “community of common destiny in the new era 2024-28”, encompassing sectors like economy, trade, politics and culture. The government’s infrastructure development initiatives further solidify the country’s commitment to fostering investor mobility and transport. Despite significant domestic involvement, the country’s transport sector requires more foreign capital in advanced technology and enhanced infrastructure, including warehousing and cold-storage facilities.


CAMBODIA'S USD 450 MN HYDROELECTRIC PROJECT ADVANCES REGIONAL ECONOMY

The government has approved the construction of 2 hydro-power projects with a capacity of 170 Megawatts (MW), valued at almost USD 450 Mn. The initiatives will benefit not only the province but also contribute significantly to the nation’s power supply, according to the Council for the Development of Cambodia (CDC). 

The group approved Khmer Electrical Power Co Ltd’s investment of USD 447.5 Mn for the ventures. The Stung Russei Chrum Kandal Hydropower Plant, located in Koh Kong’s Mondul Seima district, will have a capacity of 70 MW. The 100 MW Stung Veal Thmor Kambot facility is located in the province’s Thma Bang district. The construction of the plants is expected to create 230 new jobs and will adhere to a Build-Operate-Transfer (BOT) model, in which the company will erect and administer the stations for a contracted period of time before handing over control to the government or private sector.

 

CAMBODIA'S KOH KONG PROVINCE TO ESTABLISH GREEN SPECIAL ECONOMIC ZONE 

In a recent development, plans are being laid out for a new green special economic zone (SEZ) in Koh Kong province of Cambodia. The discussions, which took place in the coastal province recently, are paving the way for an eco-friendly industrial hub with investments estimated between USD 400 - USD 800 Mn. The discussions involved provincial authorities, representatives from the Council for the Development of Cambodia (CDC), the ministry of economy and finance (MEF), provincial governor and representatives from the British embassy in Phnom Penh among others. 

The project, expected to begin in 2024, will cover at least 300 hectares, focusing on sectors like renewable energy, sustainable waste management, automotive, electronics, and textiles. National and provincial authorities are in the process of selecting a suitable location for this initiative. The development aims to bolster environmentally sustainable practices in business and attract more foreign direct investment into Cambodia, especially in sectors currently receiving less attention.


CAMBODIA SCRAPS COAL-FIRED POWER PLANT PROJECT

Cambodia has abandoned plans to build a USD 1.5 Bn 700-megawatt (MW) coal-fired power project in a protected reserve along the country’s south-western coast and will build an 800 MW natural-gas fired plant instead. As part of the project, Cambodia is exploring construction of a liquefied natural gas (LNG) terminal to import the super-chilled fuel and re-gasify it for use in the power plant.

The planned LNG terminal, likely to be a fixed land-based facility, would be Cambodia’s first and would make it a new import market in South-East Asia. The planned Botum Sakor coal plant had been criticised by environmentalists and some residents for encroaching on some of Cambodia’s densest forest areas, risking the disruption of livelihoods and polluting the reserve, home to dozens of endangered species, with coal dust. The decision to scrap the coal project, which had been due to start producing power by the end of 2025, reflects the country’s commitment to cleaner power.


MINEBEAMITSUMI TO DEVELOP 50 MW SOLAR FARM IN CAMBODIA

MinebeaMitsumi, a maker of machined components and electronic devices, has signed a memorandum of understanding with Cambodia’s Ministry of Mines and Energy to develop solar power plants. Under the accord, the Tokyo-based company and a Cambodian government-authorized electric power provider called ShuneiTec will build a 50 MW solar farm in Krakor district, Pursat state, to power a MinebeaMitsumi factory in Phonom Penh. The solar farms are expected to go into operation in the business year ending March 2026 and will provide power for over 20 years.


CAMBODIA, UK AGREE TO PROMOTE INFRASTRUCTURE

The Ministry of Economy and Finance (MEF) and the Foreign, Commonwealth and Development Office of the United Kingdom (UK) signed a memorandum of understanding (MoU) to promote infrastructure development project cooperation between the two countries. The MoU includes the goals of identifying and securing sources of funding for infrastructure projects and facilitating the implementation of infrastructure projects between UK investment partners and the Cambodian Government under the Public-Private Partnerships (PPP) law of Cambodia.

According to the new MoU, the UK will provide technical support for and the promotion of, investment opportunities in Cambodia through the ‘British Investment Partnerships’ toolkit, the British International Investment group’s ‘ESG Toolkit for Fund Managers, a guide for responsible investors in emerging markets. The actions slated by the MoU include the mobilisation of private sector resources, vocational expertise, and connections to broaden regional and international infrastructure financing platforms, to support Cambodia’s required infrastructure needs.

 

List of Key Transactions - Cambodia Q4-2023



 

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