Project financing firm starts on a high note

PHOTO: Project financing firm starts on a high note

SINGAPORE - Clifford Capital, the new Government-backed project financing firm, said it already has a pipeline of deals lined up on its first official day of work.

The firm, which plans to provide financing to Singapore companies for infrastructure and offshore marine projects around the world, officially launched its operations last Thursday.

At a media conference yesterday, chief executive officer Clive Kerner said the firm, which counts Temasek Holdings among its shareholders, will likely seal its first deal soon.

Clifford Capital's client list is made up of mid-sized and big firms - some listed - involved in large-scale projects, he said.

For each project that it gets involved in, the firm is looking to provide direct loans of US$50 million (S$61 million) to US$100 million, representing a portion of the entire project value, he added.

"Many Singapore companies are now growing and have got to the stage where they want to go overseas, and we want to be part of that story of helping these businesses to succeed in overseas markets," Mr Kerner said.

The idea behind Clifford Capital emerged when the Economic Strategies Committee noted an absence of long-term financing for Singapore firms looking to undertake major projects overseas.

Mr Kerner also noted that the supply of infrastructure and project financing has become more limited in recent years.

European banks, which are traditionally big players in this field, are finding it more challenging to remain in the business as they are shoring up capital amid the euro zone debt crisis.

Increased banking regulations in the wake of the financial crisis have also made long-term lending less attractive for banks.

Clifford Capital will be able to provide financing at attractive rates, given that all debt it issueswill be guaranteed by the Singapore Government, which has the top AAA credit rating from the major rating agencies.

Clifford Capital's maiden fund-raising exercise, a US$1 billion Euro Medium-Term Note Programme, was rated AAA by Standard & Poor's.

The types of infrastructure projects it is looking to finance include power generation, transmission or distribution, oil and gas, waste and water treatment and transport and logistics.

Offshore marine projects could be those involving the construction of vessels such as floating storage or production units, offshore jack-up and semi-submersible rigs, and support vessels.

At Clifford Capital's official opening ceremony last night, Deputy Prime Minister Tharman Shanmugaratnam said the Singapore finance community is well-placed to help catalyse the development of infrastructure financing in Asia and beyond.

He noted that Asia's financial markets are still developing their capabilities for project financing, and that Asian capital markets are not as developed as those in the United States or Europe when it comes to the range of tools and instruments required.

Also, Asian governments are still developing their capabilities to structure public-private partnerships and tenders in a bankable and sustainable fashion.

The increased access to project financing that Clifford Capital brings will also benefit small and medium enterprises (SMEs) here, the Finance Minister noted.

"The large players - local and foreign firms which are rooted here - can help Singapore-based SMEs which are part of their supply chains to gain access to emerging markets when they obtain contracts. And as the SMEs familiarise themselves with these markets, they can hopefully take on niche projects of their own in time to come."