Note: On 30 September 2024, Singapore passed the Energy Transition Measures and Other Amendments Act 2024. The law created a Future Energy Fund (FEF) with S$5 billion in initial funding, followed by a further S$5 billion commitment in the 2025 Budget. The S$10 billion fund represents a structural redesign of Singapore’s energy system and a policy platform for Chinese new-energy companies entering Southeast Asia.
This article explains the Act, the fiscal measures and the fund’s investment routes, and identifies opportunities and risks for Chinese companies.
01 2024 Act and 2025 Budget
1. Main contents of the Future Energy Fund plan
The Singapore Government initially committed S$5 billion to support the energy transition. The fund supports low-carbon energy and supply-security projects involving advanced technology, high capital expenditure and commercial or geopolitical risks. The Act amends the EMA Act and formally establishes the fund under the Energy Market Authority (EMA), with controls over funding use, transparency and project review.
New sections 19, 19A and 19B define the fund’s composition, permitted uses and cost-recovery mechanism. The fund comprises government appropriations, legally authorized funds, private donations and investment returns. On dissolution, residual funds return to the Consolidated Fund and government reserves.
Section 19A permits support for low-carbon energy and energy-security projects, including design, surveys, engineering studies, acquisition, construction or leasing of low-carbon infrastructure, insurance and other necessary investment. It does not cover land reclamation, fuel procurement or routine project operation.
Low-carbon projects include the production, import, transport and storage of low-carbon electricity, related waste management, energy-storage systems and transmission or distribution of imported electricity. Energy-security projects include improvements to Singapore’s grid and backup infrastructure such as energy-storage systems, rapid-response generators, load-management systems and combined-cycle gas turbines.
Section 19B allows the EMA to recover costs related to energy security, market development and decarbonization from beneficiaries, including electricity, gas and district-cooling users, based on indices, formulas or other methods.
2. Main contents of Singapore’s 2025 Budget
The Government added S$5 billion to the FEF to support clean-energy access and energy security. Singapore plans major investment in imported electricity, hydrogen, nuclear energy and other infrastructure. In the short term, regional electricity imports will provide low-carbon power; by 2035, imported electricity is expected to meet about one-third of national demand. The Government is also developing domestic clean energy to improve resilience and pursue net-zero emissions.
02 Act analysis
1. Why is Singapore investing S$10 billion in energy?
Singapore relies on natural gas for more than 95% of its electricity. Although stable, gas is carbon-intensive and contributes roughly 40% of national emissions. The 2050 net-zero target cannot be achieved through efficiency improvements alone.
Singapore therefore seeks a gradual transition based on technology and market mechanisms rather than abrupt decoupling. It must protect supply, control costs and manage geopolitical risks. The FEF is a central tool for buying technology and equipment while securing long-term stability and competitiveness.
2. How will the S$10 billion Future Energy Fund work?
1. Where does the money come from?
The fund began with S$5 billion in government funding. Section 19 also allows the EMA to impose future energy-transition charges on large electricity users, gas companies and district-cooling users. The fund may accept private donations and earn investment returns, with residual funds ultimately returning to the national reserve system.
2. What will the money be used for?
- Cross-border electricity imports, including solar and wind power from Indonesia and Malaysia, with a target of one-third imported electricity by 2035;
- New infrastructure such as hydrogen pipelines, small modular reactors and large-scale storage; and
- Backup systems such as rapid-response generators, load management and energy-storage solutions.
The Act does not allow the fund to finance land reclamation, fuel purchases or ordinary operating expenses.
3. Who regulates the projects?
Projects must pass EMA review on:
- Technical feasibility and effectiveness;
- Financial transparency and proper use of funds; and
- Geopolitical and political risk.
3. Three opportunities for Chinese new-energy companies
1. Consortium participation in cross-border electricity
Singapore plans to import one-third of its electricity by 2035. The 2GW Indonesia-Singapore subsea-cable project, for example, has a budget of about S$3.1 billion. Chinese power SOEs, equipment manufacturers and EPC contractors can form consortia and bid for project packages.
2. Equipment and technology supply
Energy-storage systems, high-efficiency modules, hydrogen tanks and small modular nuclear solutions may have market potential. Suppliers must pass EMA certification and meet A*STAR standards, Singapore’s green-finance taxonomy and relevant EU or ASEAN standards.
3. Certification and the green list
Singapore’s sustainable-finance taxonomy aligns with the EU taxonomy. Government support for a green project will increasingly depend on ESG disclosure, carbon-footprint standards, financing structure and other compliance requirements.
4. Risk warnings
1. The fund will not cover routine operating expenses
Section 19A excludes maintenance, staffing and ordinary operating costs after a project begins operation. The operator bears those costs.
2. Geopolitical risks must be addressed early
Cross-border electricity projects face policy shifts, tariff intervention and exchange-rate volatility. International political-risk insurance and a carefully designed legal framework should be considered.
3. Combine technology with financing
The fund is more likely to support solutions that include financing. Companies should be able to package equipment, technical services, project finance and operation-management capabilities.
03 The 2025 window
Singapore’s 2025 priorities include cross-border cables, floating solar, hydrogen facilities and small modular nuclear technology. The Government’s measures create opportunities for localization and innovation.
| Measure | Field | Key content |
|---|---|---|
| FEF increase | Cross-border cables, floating solar and hydrogen | Support clean-energy projects, electricity transmission and hydrogen facilities |
| Low-carbon technology testbed | Hydrogen and innovative low-carbon technology | Accelerate commercialization and technology transfer |
| Nuclear research and capability building | Small modular nuclear | Study applications, strengthen nuclear safety and train talent |
Singapore is pursuing a diversified energy strategy: supporting mature technologies such as floating solar and electricity imports while preparing for hydrogen and nuclear applications. Companies should localize early and innovate in the areas receiving policy support.
Conclusion
Singapore’s S$10 billion energy fund is a coordinated restructuring of policy, market and capital, aimed at building a safe, green and intelligent power system for the Asia-Pacific region.
For Chinese companies, this is not merely a technology-export opportunity; it is a test of global compliance capability. Companies that integrate technology, financing and compliance into a single overseas-investment package will be better positioned to win major Southeast Asian projects. The window is open now.
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This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.