MAS starts pilot scheme to help insurers invest in green ventures

DPM Wong says industry can play role in region's net-zero transition

- Claire Huang

Singapore's central bank is working on a pilot scheme to help insurers make investments in sustainability-related infrastructure projects in Asia.

The scheme aims to enhance insurers' familiarity and comfort with infrastructure investments.

It will test elements such as risk guard rails, risk-appropriate regulatory treatment and capability-building facilities, said Deputy Prime Minister and Finance Minister Lawrence Wong on Tuesday.

DPM Wong said the hope is that the initiative can motivate insurers to allocate some of their investment portfolio to infrastructure projects that have decarbonisation potential, and play a role in the region's net-zero transition.

"As underwriters, the industry can develop insurance solutions for renewable energy infrastructure and emerging technologies with promising decarbonisation potential.

"These solutions can mitigate risk and help crowd in much-needed private capital," said DPM Wong, who is also chairman of the Monetary Authority of Singapore (MAS).

Speaking at the Global Insurance Forum, held at Hilton Orchard, he said renewable energy infrastructure, such as solar and wind plants, has variable returns as it relies on the weather.

To mitigate this, some renewable plants can have parametric insurance covers that pay out when energy output falls below pre-agreed thresholds.