Project Finance 2026 Comparisons

In respect of project financing for projects located in Singapore, sponsors are typically strategic corporate sponsors, including companies in the utilities, energy, infrastructure and engineering sectors. Commercial banks, including Singapore and international banks, are a principal source of senior project finance debt, with financing commonly provided on a syndicated basis.

Singapore has employed public-private partnerships (PPPs) on a case-by-case basis for specific projects, including in water, waste management and other public infrastructure sectors. As a category of government procurement, PPPs generally fall under the Government Procurement Act 1997 and its related subsidiary legislation, with the Ministry of Finance responsible for setting the procurement policies that guide how government agencies carry out procurement.

Key considerations for investors and lenders include:

• the applicable regulatory framework;
• the allocation of project risks among the public authority, private sector participants and financiers; and
• the robustness of the contractual arrangements.

PPP transactions can also present challenges that may affect the timing and viability of private sector involvement, notably protracted procurement timelines and substantial upfront costs. In addition, PPP structures demand careful alignment of stakeholder incentives, underpinned by suitable governance, monitoring and enforcement mechanisms to ensure effective project delivery.

Key considerations when structuring a project financing include:

• project bankability – the adequacy of the revenue model, including the terms of any offtake agreements or other material revenue-generating contracts;
• capital structure – ensuring that an appropriate debt-to-equity ratio applies, and assessing the project company’s debt-servicing capabilities;
• risk allocation – ensuring that risks (eg, construction, operational and currency risks) are appropriately allocated; and
• regulatory and legal requirements – ensuring that the necessary protections, rights, licences and approvals are in place.

Projects located in Singapore are typically funded through a combination of sponsor equity and debt financing, with senior debt commonly provided by local and international commercial banks. Depending on the project’s financing requirements and risk profile, additional funding may be provided through shareholder loans or subordinated debt. Bond issuances are also an alternative, although bank lending is more typical for project financings in Singapore. The choice of funding structure will depend on various factors, including the project’s capital requirements, projected cash flows and allocation of risks.

The digital infrastructure sector is expected to remain particularly active in the coming year, driven by accelerating digitalisation and AI-related demand for high-density computing capacity, although new data centre capacity in Singapore remains subject to a calibrated allocation process and resource-efficiency factors. Energy infrastructure may also present financing opportunities, driven by Singapore’s growing electricity demand and regional efforts to expand renewable energy generation, energy storage and cross-border electricity interconnections.

Asset Types

All classes of assets may potentially be available as collateral, provided the grant thereof is not against public policy. A non-exhaustive list of such common classes of collateral is set out below.

Real property

A legal or equitable mortgage or charge is commonly granted over real property, including land and fixtures (such as buildings and immovable plant). Where title has not yet been issued, security is typically taken by way of an assignment of the relevant sale and purchase agreement or lease or building agreement, together with a mortgage-in-escrow to be perfected upon issuance of title. The appropriate type of security will depend on whether title over the land has been issued, the land type and the type of holding, amongst other factors.

There are two types of land in Singapore: common law titled land and land governed by the Land Titles Act 1993 (the “Land Titles Act”). A legal mortgage over land under the Land Titles Act must be in a statutorily prescribed form and registered with the Singapore Land Authority (SLA) to be perfected as a registered mortgage. Failure to register may affect the lender’s priority and its ability to rely on the security as a registered mortgage.

Machinery and equipment

Security over machinery and equipment is commonly taken by way of a fixed charge or debenture.

Receivables and bank accounts

Security over receivables and credit balances in bank accounts is typically taken by way of an assignment or charge, usually documented as a deed of assignment/charge or a debenture. A legal assignment must be in writing, and perfected by express written notice given to the debtor of the receivables; the giving of notice also determines priority between competing assignees. A charge over receivables may be fixed or floating. A fixed charge or legal assignment may be appropriate where the lenders intend to exercise control over the receivables. Where the receivables form part of the security provider’s ordinary business operations and are to remain generally available for its use prior to the occurrence of any default, a floating charge may be more appropriate.

Inventory

Inventory is typically secured by a floating charge, which generally allows the security provider to deal with the inventory in the ordinary course of business until the charge crystallises (eg, following a default or notice from the lenders).

Shares

Shares in Singapore may be in certificated (scrip) or scripless form.

Where shares are certificated, security may be taken by way of a legal or equitable mortgage. A legal mortgage generally involves transferring and registering the shares in the mortgagee’s name and delivering the share certificates to the mortgagee. An equitable mortgage/charge is typically granted by way of a share charge, accompanied by signed blank share transfer forms and the delivery of the share certificates.

Where shares are in scripless form (ie, book-entry securities, being listed shares on the Singapore Exchange), by statute, security may be created by a statutory assignment or charge in prescribed form registered with the Central Depository (Pte) Limited, or by common law subject to the applicable requirements.

General Formalities and Perfection Requirements

Dutiable security documents must generally be stamped within 14 days after execution in Singapore or, if executed outside Singapore, within 30 days after its receipt in Singapore. Mortgage duty may apply to certain security instruments over shares or immovable property in Singapore, depending on the nature of the instrument, and is generally subject to a maximum of SGD500. Late stamping may attract penalties.

A registrable charge created by a Singapore company or a foreign company registered in Singapore must generally be registered with the Accounting and Corporate Regulatory Authority (ACRA) within 30 days after its creation if created in Singapore, or within 37 days if created outside Singapore. The registration fee is currently SGD60 for each charge. Failure to register within the applicable period renders the charge void against the chargor’s liquidator and creditors. Additional registration requirements may apply to security over assets such as land, aircraft, ships and intellectual property rights.

Security in Favour of a Security Agent

Security may be created in favour of a security agent to hold for the benefit of the lenders and other secured parties.

A company may grant security over its present and future assets using a floating charge.

Please see 2.1 Assets Available as Collateral to Lenders.

The required degree of identification of collateral in a security document depends on the asset type and the form of security. A fixed charge generally requires the charged assets to be identifiable and ascertainable. By contrast, a floating charge may cover a sufficiently identifiable class of present and future assets without each asset being identified individually, such as inventory or accounts receivable that change in the ordinary course of business.

Singapore law generally permits Singapore entities to provide downstream, upstream and cross-stream guarantees, subject to applicable corporate benefit considerations and the directors’ fiduciary duties to the company.

In the context of an acquisition, financial assistance provisions under Section 76 of the Companies Act 1967 (“Companies Act”) may restrict the granting of security or guarantees in certain situations. Section 76 restricts a public company – or a company whose holding company or ultimate holding company is a public company – from directly or indirectly providing any financial assistance for the purpose of, or in connection with, the acquisition or proposed acquisition of shares in itself or in its holding company or ultimate holding company which is a public company. Financial assistance may include the provision of guarantees or security. Certain statutory exceptions and procedures may permit financial assistance to be provided if the applicable conditions are satisfied.

As explained in 2.1 Assets Available as Collateral to Lenders, the creation of a registrable charge by a Singapore company or a foreign company registered in Singapore will give rise to registration requirements with ACRA. Details of a company’s registered charges can be obtained from ACRA for a fee.

Lenders typically conduct searches of the relevant company’s records with ACRA as part of their due diligence process. They also take contractual representations and negative pledge covenants from the borrower and, where relevant, from the other security providers.

Depending on the nature of the collateral, lenders may also conduct searches of the relevant specialist registries to identify existing encumbrances or competing interests. For example, searches of land title records may be conducted with the Singapore Land Authority in respect of registered land.

Security is generally released through a deed of release or discharge executed by the secured party in favour of the security provider.

Where the security was registered with ACRA, an appropriate statement of satisfaction is ordinarily filed to update the public register. Security over specific asset classes may require discharge filings at the relevant specialist registry. For example, a mortgage over registered land will need to be discharged in the prescribed form and lodged with the SLA.

The circumstances under which a secured lender may enforce its collateral will depend primarily on the terms of the security documents. The circumstances typically include events of default, such as non-payment of the loan.

Enforcement methods a secured lender may employ include seizing and/or selling the collateral (whether through private or court processes), and appointing a receiver over the collateral. When seeking to enforce collateral, secured lenders will have to consider, among other things:

• whether the value of the collateral is sufficient to cover the loan provided;
• whether there are competing claims over the collateral; and
• whether there are any other prohibitions to enforcement, such as those which may arise when the debtor company is being wound up or placed in judicial management.

The choice of a foreign law as the governing law of the contract will typically be upheld under Singapore law, as long as the application of foreign law is not contrary to public policy and the choice is bona fide and legal.

Similarly, the Singapore courts will typically uphold a party’s submission to a foreign jurisdiction. Where a party has submitted exclusively to the jurisdiction of a state that is a party to the Hague Convention, the Singapore Choice of Court Agreements Act 2016 (CCAA) will apply and the Singapore courts will, generally, subject to certain exceptions, stay or dismiss proceedings in the Singapore courts.

Even where the CCAA does not apply, the Singapore courts will generally stay local proceedings where there is a valid exclusive jurisdiction clause, unless strong cause as to why such a stay should be refused is shown, such as a denial of justice.

Contractual waivers are also typically upheld under Singapore law. In particular, there may be waivers of sovereign immunity under the circumstances set out in the Singapore State Immunity Act 1979.

Foreign judgments may be recognised and enforced in Singapore without a retrial of the merits of the case in the following ways:

• under the Reciprocal Enforcement of Foreign Judgments Act 1959 (REFJA);
• under the CCAA; or
• by way of the common law recognition and enforcement regime.

REFJA

The REFJA applies to judgments from the following countries:

• Australia;
• Brunei;
• Hong Kong;
• India;
• Malaysia;
• New Zealand;
• Pakistan;
• Papua New Guinea;
• Sri Lanka; and
• the United Kingdom.

It does not apply to any judgment that may be recognised or enforced in Singapore under the CCAA.

CCAA

Foreign judgments may also be recognised under the CCAA, which applies in every international case where there is an exclusive choice of court agreement concluded in a civil or commercial matter.

Under the CCAA, foreign judgments from over 30 jurisdictions may be recognised and enforced by the Singapore courts without a review of the merits of the foreign judgment if the conditions set out in the CCAA are met.

Common Law

In situations that fall outside the scope of the REFJA and the CCAA, a judgment creditor may also apply for the recognition and enforcement of the relevant foreign judgment under common law.

A foreign judgment may be enforced under the common law recognition and enforcement regime without a retrial of the merits of the case if:

• it was made by a court of competent jurisdiction;
• the foreign court had jurisdiction to give a judgment in personam capable of recognition or enforcement as against the person against whom it was given (eg, by submission to the jurisdiction of that court);
• it is final and conclusive on the merits;
• it is a final judgment for a fixed sum of money;
• it does not involve the enforcement of foreign penal, revenue or other public laws; and
• there is no defence to its recognition.

Arbitral Awards

In general, foreign arbitral awards may be recognised and enforced in Singapore in accordance with the New York Convention read with the Singapore International Arbitration Act 1994 (pursuant to which the UNCITRAL Model Law on International Commercial Arbitration is put into force with modifications) without a retrial of the merits of the case.

Typically, the fact that a lender is foreign does not affect its ability to enforce its rights under a loan or security agreement. That said, if a foreign lender commences legal proceedings in Singapore to enforce its rights, the borrower (ie, defendant) may apply to court to ask that the lender provide security for its costs. In that case, the fact that the lender is ordinarily resident outside Singapore is one factor which the Singapore courts will take into account in determining whether to grant the security for costs.

The Moneylenders Act 2008 (“MA 2008”) generally prohibits any person from carrying on, or holding themselves out as carrying on, the business of money lending in Singapore without a licence, unless they qualify as an exempt or excluded money lender. A person who carries on the business of money lending in Singapore wholly or partly from outside Singapore is treated as carrying on that business in Singapore.

Excluded money lenders include persons licensed or otherwise regulated by the Monetary Authority of Singapore to the extent they are permitted to lend money, and persons who lend money solely to specified categories of borrowers, such as corporations. These exclusions may be relevant to project financings, where borrowers are typically corporate entities and lenders are frequently regulated financial institutions. Whether an exclusion or exemption applies depends on the lender’s circumstances and the nature of its activities.

There are generally no restrictions on a Singapore entity granting security or guarantees in favour of foreign lenders by reason of their foreign status, although such security or guarantees remain subject to the applicable legal and regulatory requirements.

Singapore generally adopts a relatively open foreign investment regime. However, certain sectors are subject to foreign investment restrictions and controls, including broadcasting, newspapers, financial services and legal services. Restrictions also apply to foreign ownership of certain categories of real estate (please see 5.2 Licence Requirements regarding land ownership restrictions).

In addition, the Significant Investments Review Act 2024 (SIRA), enacted in 2024, introduces a new investment management regime which applies to both foreign and local investors. Under SIRA, entities that are designated as critical to Singapore’s national security may be subject to certain ownership and control requirements. Designated entities include businesses operating in the defence engineering and logistics industries.

Singapore does not generally impose restrictions on payments abroad or the repatriation of capital by foreign investors.

Project companies are generally permitted to maintain offshore foreign currency accounts.

In general, financing and project documents do not require registration or filing with government authorities to be valid and enforceable. However, registrations may be required for certain security interests; please see 2.1 Assets Available as Collateral to Lenders.

There is no general framework restricting foreign entities from owning land for commercial or industrial use. However, foreign persons (as defined under the Residential Property Act 1976) generally require approval to acquire restricted residential property, which includes landed residential property and vacant residential land. This restriction was extended in July 2023 to land zoned or permitted for “Commercial & Residential” use, which was previously treated as non-residential property. Ownership of land does not in itself require a licence, although land development and use may be subject to planning permission and building control requirements.

Singapore has limited natural resources.

Singapore recognises the concepts of both agency and trust. Security may be created in favour of a security trustee to hold the security on trust for the lenders and other secured parties.

Trust structures are well established in Singapore, and alternative structures are generally not required.

The priority of competing security interests is determined by the applicable statutory and common law rules, which vary depending on the nature of the security interest and the relevant collateral. In general, priority may depend on various factors, including:

• the order in which security interests were created;
• whether and when they are registered (where registration is required);
• the nature of the interests; and
• whether the relevant parties have notice of an earlier interest.

A registrable charge that is not registered with ACRA within the prescribed statutory period may be void against the chargor’s liquidator and creditors.

Subordination is commonly effected through contractual provisions in a subordination deed or other relevant finance documents. Creditors may also agree contractually to vary their relative ranking, typically through an intercreditor agreement.

Contractual subordination arrangements are generally enforceable under Singapore law, subject to applicable statutory requirements and public policy. Their effectiveness will depend on the nature of the arrangement and its interaction with applicable laws, including the rules that apply in insolvency and restructuring proceedings.

There is generally no requirement for a project company to be incorporated in Singapore solely because the project is in Singapore. The appropriate structure will depend on the project and any applicable sector-specific licensing, regulatory or ownership requirements. Project companies are typically special-purpose vehicles established by the project sponsors, commonly as private companies limited by shares under Singapore law.

In Singapore, company reorganisation procedures apart from liquidation include judicial management and schemes of arrangement.

Judicial Management

Judicial management is a process where a judicial manager is appointed to rehabilitate the distressed company, preserve all or part of the company’s business as a going concern, or achieve a more favourable outcome for the company’s creditors than if the company was wound up.

As part of the judicial management process, the judicial manager will take over the property, affairs and operations of the company.

Schemes of Arrangement

A scheme of arrangement is a court-sanctioned compromise or arrangement between a distressed company and its creditors or shareholders that enables the company to restructure its debts while still operating.

In a scheme of arrangement, the company retains control of its property, affairs and operations.

The commencement of insolvency and restructuring-related processes may impact the enforcement of a loan or security primarily through the imposition of statutory moratoria, in the following ways.

Winding-Up

In a winding-up by the court, the Insolvency, Restructuring, and Dissolution Act 2018 (IRDA) provides for an automatic moratorium upon either the making of a winding-up order, or the appointment of a provisional liquidator. In a creditors’ voluntary winding-up, a similar moratorium applies after commencement of the winding-up. During the automatic moratorium period, no action or proceeding may be proceeded with or commenced against the company except by permission of the court and in accordance with such terms as the court may impose. However, such a moratorium generally does not apply to the enforcement of security.

Where a company is wound up on an insolvent basis, a secured creditor cannot claim any interest on their debt after commencement of the winding-up, unless the secured creditor realises their security within 12 months after the commencement date, or within such further period determined by the liquidator.

Judicial Management

The IRDA provides for an automatic moratorium when an application for a judicial management order is made, or when a written notice of the appointment of an interim judicial manager is lodged (ie, where the company appoints an interim judicial manager with a view to the creditors subsequently resolving to place the company into judicial management instead of by order of court).

During this automatic moratorium period, among other things:

• no step may be taken to enforce any security over any property of the company, or to repossess any goods under any hire‑purchase agreement, chattels leasing agreement or retention of title agreement, except with the permission of the court and subject to such terms as the court may impose; and
• no enforcement order or other legal process may be issued, continued or executed, and no distress may be levied, against the company or its property, except with the permission of the court and subject to such terms as the court may impose.

Under the IRDA, an automatic moratorium also takes effect upon the court’s grant of a judicial management order. In such event, creditors are generally prohibited from enforcing any security over the company’s assets without the court or judicial manager’s permission. Similarly, a secured creditor cannot claim any interest on their debt from the date permission was granted unless the secured creditor realises their security within 12 months of receiving permission to do so, or within such further period determined by the judicial manager.

Schemes of Arrangement

The Singapore courts may grant a moratorium, which may cover the enforcement of security.

Under the IRDA, an automatic 30-day moratorium comes into effect on the filing of a moratorium application (subject to the relevant statutory requirements being satisfied). In addition, related companies of the subject company can apply for a separate moratorium under the IRDA.

Creditors are broadly paid out in the following order on a debtor company’s insolvency.

• Secured creditors holding fixed security generally have priority in respect of the assets subject to security, and may enforce their rights in respect of the security taken over the debtor company’s assets ahead of preferential and unsecured creditors. However, certain preferential debts may rank ahead of claims secured by a floating charge and may be paid out of assets subject to that floating charge.
• Preferential creditors – under the IRDA, the key preferential creditors who must be paid in priority to all other unsecured debts include:
1. costs and expenses of the winding-up incurred by the liquidator of the insolvent company;
2. costs of the applicant for the winding-up order;
3. all wages and salaries payable to any employee, subject to the prescribed limit; and
4. retrenchment benefit or ex gratia payment, subject to the prescribed limit.
• Unsecured creditors (ie, creditors who do not hold security over the debtor company’s assets) are paid on a pari passu basis after the secured and preferential creditors are paid.

A key risk area for lenders is that certain transactions which they may enter into with the borrower prior to the commencement of judicial management or winding-up proceedings (eg, for the repayment of the debt) are at risk of being set aside.

Where a company is in judicial management or is being wound up, the judicial manager or liquidator (as the case may be) may apply to court for an order to set aside certain transactions at an undervalue and/or transactions that constitute an unfair preference which occurred prior to the commencement of judicial management or winding-up. This claw-back period ranges from three years (transactions at an undervalue) to two years (unfair preferences, if given to a person connected with the company; if not, one year) before the commencement of liquidation or judicial management.

Furthermore, a floating charge on the debtor company’s property created within one year (two years if in favour of a person connected with the company) prior to the commencement of the judicial management or winding-up may generally be invalid except to the extent of the value of the consideration (to the extent that the consideration consists of money paid, goods or services supplied, or the discharge or reduction of debt) for the creation of the charge together with interest. In the case of a charge created in favour of an unconnected person, the charge may be vulnerable if the company was insolvent at the time the floating charge was created or became insolvent as a consequence of the transaction.

In general, the insolvency regime under the IRDA applies to companies incorporated under the Companies Act. Other companies (eg, insurers and statutory boards) should have regard to their respective constituting statutes.

In general, there are no specific restrictions or controls applicable to insurance policies over project assets merely by reason of their use in project financing. However, insurers carrying on insurance business in Singapore are subject to applicable licensing and regulatory requirements under the Insurance Act 1966. Goods and services tax may apply to general insurance premiums, subject to applicable zero-rating.

Insurance proceeds relating to project assets may generally be paid to foreign creditors. Lenders typically obtain rights to insurance proceeds through a security assignment of the relevant policies and proceeds, and may also be named as loss payees or co-insureds. Payment to lenders (or a security agent acting on their behalf) is subject to the terms of the relevant policies and, where applicable, the effectiveness of the security.

Singapore imposes tax only on income and not on capital. Accordingly, the receipt of repayment of principal on a loan is not taxed in Singapore.

Generally, any interest, commission, fee or any other payment in connection with any loan or indebtedness is deemed to be sourced in Singapore if it is borne, directly or indirectly, by a tax resident of Singapore or a permanent establishment in Singapore (subject to exceptions) (a “Section 12(6) Payment”). Where made to a person not known to the payor to be a resident in Singapore, Section 12(6) Paymentsare generally subject to withholding tax in Singapore, unless specifically exempted.

• An entity is a tax resident of Singapore if the “control and management” of its business is exercised in Singapore. This usually means that strategic decisions of the business are made through the meetings of the company’s board of directors in Singapore.
• An individual is generally a tax resident of Singapore if they reside in Singapore except for temporary absences, including those who have stayed/worked in Singapore for at least 183 days in the previous calendar year.

The withholding tax rate for payments that are neither derived from any trade or business carried on in Singapore nor effectively connected with any permanent establishment in Singapore is 15% on the gross payment. Otherwise, such payments would be subject to a non-final tax at 17%, with deductions available. These rates may be reduced under applicable tax treaties.

Exemptions are available for payments such as those made:

• to Singapore branches of non-resident companies;
• by banks in Singapore to their branches/head offices outside Singapore or another bank outside Singapore;
• by banks, finance companies and certain approved entities for the purpose of their trade or business; or
• where the financing is raised through the issuance of “qualifying debt securities” (QDS). Where debt securities qualify as QDS under Singapore’s Income Tax Act 1947 (ITA), interest, discounts, early redemption fees and redemption premiums derived from the QDS may benefit from Singapore withholding tax exemptions and other tax concessions.

Income Tax

Lenders may derive income that is taxable in Singapore. The ITA subjects income (including income of foreign entities operating in Singapore) to tax if it is either sourced in Singapore or remitted into Singapore from outside Singapore. Income would generally be sourced in Singapore if the income-producing activities took place in Singapore. Income may also be deemed remitted into Singapore if it is used to satisfy any debt incurred in respect of a trade or business carried on in Singapore or used to purchase any movable property brought into Singapore.

Stamp Duties

Stamp duties are payable on dutiable documents relating to immovable properties in Singapore or stocks or shares of Singapore companies.

Generally, loan agreements or security documents that create security over immovable property in Singapore or stocks or shares of Singapore companies are dutiable documents and would be subject to stamp duties (capped at SGD500) at the following rates on the loan amount.

• Mortgage other than an equitable mortgage: 0.4%.
• Equitable mortgage: 0.2% on immovable property; exempt for stocks or shares.

Dutiable documents must be stamped within the following timeframes:

• 14 days after the date the document is executed, if executed in Singapore; or
• 30 days after it is received in Singapore, if executed outside Singapore and subsequently brought into Singapore.

Goods and Services Tax (or Value-Added Tax)

Generally, the provision of financial services (such as lending) is considered an exempt supply not subject to goods and services tax in Singapore.

Interest rates in commercial lending transactions are generally a matter of commercial agreement between the parties, subject to applicable law.

For licensed money lenders, interest rates are subject to statutory restrictions under the MA 2008 and the Moneylenders Rules 2009 (the “Moneylenders Rules”). Pursuant to Section 36(1) of the MA 2008 and Rule 11(1) of the Moneylenders Rules, a licensed money lender may not charge interest at a rate exceeding 4% per month, subject to exceptions in the Moneylenders Rules. Excluded money lenders are generally not subject to these restrictions (please see 4.1 Restrictions on Foreign Lenders Granting Loans).

Project agreements relating to projects and assets situated in Singapore are typically governed by Singapore law, although the parties may agree to a different governing law where appropriate.

Financing agreements relating to projects in Singapore are typically governed by Singapore law, although the parties may agree to a different governing law where appropriate. Security documents relating to assets in Singapore are also typically governed by Singapore law, particularly in view of local law requirements relating to the creation, perfection and enforcement of security.

Matters typically governed by Singapore law include:

• the capacity and authority of Singapore-incorporated entities;
• the creation and perfection of security over assets situated in Singapore;
• regulatory and licensing requirements applicable to projects in Singapore;
• insolvency proceedings commenced in Singapore; and
• the local procedures applicable to enforcement against assets situated in Singapore.