Standard credit risks in infrastructure projects
Overview
Whilst the credit risk assessment for renewable energy comes with some unique characteristics, as renewable energy projects are infrastructure projects, many of the standard credit risk assessment criteria for assessing infrastructure projects similarly apply.
Whilst Singapore is constrained in the diversity of renewable energy sources, the country has established a plan to tap the abundant sunlight and has started importing low-carbon electricity through regional electricity grids. Singapore has set out a target to deploy at least two gigawatt-peak of solar energy by 2030, enough to power around 350,000 households a year, and aims to import around six gigawatts of low-carbon electricity by 2035.
There are no pure-play renewable energy players in the (Singapore dollar) Singdollar credit market, although three corporate issuers stand out for their involvement in this sector, namely Sembcorp Industries (SGX:U96
) (SCI), Keppel and Keppel Infrastructure Trust (SGX:A7RU) (KIT). Keppel and KIT have relatively diversified income streams across different business segments, while SCI, which focuses on power generation, still relies on income from brown energy aside from its integrated urban solutions business.
