Budget 2021: $500m to boost large local enterprises, with support from Temasek

Nicholas Yong
·Assistant News Editor
·2 min read
The skyscrapers of downtown Singapore stand tall on a clear blue sky day in the Lion City. Vibrant cityscape background with copy space.
The skyscrapers of downtown Singapore. (PHOTO: Getty Images)

SINGAPORE — A total of $500 million will be set aside by the government to boost large local enterprises via the Local Enterprises Funding Platform, with Temasek Holdings matching the government's funds on a one-for-one basis, said Finance Minister and Deputy Prime Minister Heng Swee Keat on Tuesday (16 February).

This means that there will be $1 billion available for the platform's investments, which will be managed commercially.

Delivering the Emerging Stronger Together Budget in Parliament, Heng told the House, "The platform will invest in non-control equity and mezzanine debt of selected Large Local Enterprises (LLE), which are willing to work with the fund manager to pursue their next phase of growth."

He further noted that Temasek will bring its "strong commercial discipline" to the partnership. More details on the fund will be provided by the Ministry of Trade and Industry.

The move is to ensure growth capital is available for LLEs that are ready to transform or expand overseas on a larger scale.

Venture Debt programme enhanced

Finance Minister and Deputy Prime Minister Heng Swee Keat delivers the Emerging Strong Together Budget in Parliament on Tuesday, 16 February 2021. (SCREENCAP: Ministry of Communications and Information YouTube channel
)
Finance Minister and Deputy Prime Minister Heng Swee Keat delivers the Emerging Strong Together Budget in Parliament on Tuesday, 16 February 2021. (SCREENCAP: Ministry of Communications and Information YouTube channel )

The DPM noted that Singapore's ecosystem of budding entrepreneurs and venture funds is growing. "From 2016 to 2019, there has been annualised growth of 44 per cent in the amount of early stage funds raised for promising enterprises," he said.

In this regard, the government will increase the cap on loan quantum supported from $5 million to $8 million, under the Venture Debt programme. This sees the government sharing up to 70 per cent of the risk on eligible loans with participating financial institutions.

'With this, we expect about $45 million of venture debt to be catalysed over the next year," said Heng.

Support for mature enterprises

A total of $1 billion will also be set aside for various schemes to encourage mature enterprises to invest in new and emerging technologies, in order to sharpen their competitiveness. For example, the new Emerging Technology Programme will co-fund the costs of trials and adoption of frontier technologies like 5G, artificial intelligence and trust technologies.

Furthermore, the government will extend the enhanced support levels of up to 80 per cent for existing enterprise schemes, such as the Startup SG programme and Productivity Solutions Grant, to end-March 2022.

Heng noted that a critical part of business transformation will be in job redesign, given that technological advances mean many tasks that are physically demanding or repetitive can be better done by machines.

"With an ageing workforce, we must leverage technology to develop senior-friendly workplaces."

For more Budget 2021 updates: http://yhoo.it/37A35Rd

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