Bridging Borders, Building Trust: Singapore’s Role in the Next Chapter of ASEAN Integration

An interview with Mr. Lim Boon Heng, Chairman of Temasek Holdings and member of CAPRI’s International Advisory Council

Conducted by Alicia Ong, CAPRI Intern

May 12, 2025

Nicknamed the “Little Red Dot,” Singapore, where I hail from, is globally recognized for its world-class infrastructure and strategic connectivity. With 27 free-trade agreements in place, Singapore continues to serve as a vital hub for investment and trade, especially in Southeast Asia.

As the country positions itself as a gateway for global and regional business, public–private partnerships (PPPs) offer a promising model for long-term development. In a PPP, governments and private companies share risks and returns, pooling complementary resources.^[1] Successful examples in the region include Singapore’s SingSpring Desalination Plant and Indonesia’s Trans-Java Toll Road.^[2] These projects exemplify how strong collaboration between the public and private sectors can deliver complex infrastructure and services.

However, the road to effective cooperation is not without challenges. As Deputy Prime Minister Gan Kim Yong noted at the 2024 Milken Institute Asia Summit, climate change, demographic pressures, public health risks, and disruptive technologies all threaten to undermine the resilience of regional supply chains.^[3] In such a volatile environment, strategic foresight and adaptive governance are key to ensuring continued economic success.

This sentiment is echoed by Mr. Lim Boon Heng, former minister in the Prime Minister’s Office of Singapore (2001–2011), Chairman of Temasek Holdings, Pte. Ltd., and a member of CAPRI’s International Advisory Council. At the 2025 CAPRI Annual Forum, he spoke at the panel “Public Problems, Private Solutions: How Asia’s Private Sector Can Respond to Uncertainty,” calling for leaders from both public and private sectors to come together and develop a shared framework for cooperation, thereby promoting overall resilience.

Following the forum, I got an opportunity to interview Mr. Lim, a well-known figure in Singapore. Given his extensive experience in both public and private sectors, I sought his insights on regional PPPs and the intricate dynamics of public–private collaboration in Southeast Asia. The following are some excerpts from the interview.

Q: Can you share an example of a public–private partnership in the energy sector within Southeast Asia?

Lim: Keppel Electric attempted to purchase hydroelectric power from Laos and transmit it via Thailand and Malaysia to Singapore. Although a private-sector initiative between Singapore’s Keppel and Electricite du Laos, it requires intergovernmental agreements. The project has stalled because Thai authorities have been prioritizing purchasing the power for Thailand’s own domestic use instead of transmitting it to Singapore.[4] This response exposed a much deeper issue: a lack of regional cooperation.

A similar situation occurred with excess hydropower in the Malaysian state of Sarawak. Malaysia proposed selling it to Singapore via an undersea cable that would pass through Indonesian waters. But the project has been facing many political and regulatory hurdles. This is yet another example of the necessity of government support and cooperation for such cross-border initiatives, especially when private capital is available.

Q: Why is government support essential in these kinds of cross-border PPPs?

Lim: Governments are responsible for securing intergovernmental agreements, particularly in cross-border projects, where the risk is simply too great for the private sector to shoulder alone. The role of private companies lies in handling commercial viability and providing funding. However, large-scale infrastructure, such as undersea cables, require significant upfront investment. If one government withdraws support or revokes access, the entire venture can collapse. This is why cross-border PPPs must rest on strong political will and coordination.

Q: Are there partnership models that include not just public and private actors, but also philanthropic organizations?

Lim: Yes. One example is the planned early decommissioning of the South Luzon Thermal Energy Corporation (SLTEC) coal plant in the Philippines.[5] This initiative brings together the Philippine government, the plant operator, GenZero (a Temasek-owned decarbonization investment platform), and the Rockefeller Foundation. The foundation provides financial support to compensate the operator for closing the plant early, allowing the transition to renewable energy while helping the operator recover sunk costs. GenZero structures financing using a special purpose vehicle that blends equity, debt, and transitional carbon credits under Article 6 of the Paris Agreement, ensuring both environmental integrity and financial viability.

This model not only supports a managed transition to renewable energy but also embeds just transition measures, such as labor reskilling. The SLTEC initiative serves as a flagship example of scalable energy transition in emerging markets. It will be presented at an upcoming conference in Hanoi to show how integrated private–public–philanthropic frameworks can align national decarbonization efforts with global climate goals.

Q: Given the diversity of ASEAN’s political and economic conditions—such as Myanmar’s ongoing conflict or Laos’s debt to China—is regional cooperation truly feasible?

Lim: No single country can solve these challenges alone. They require multilateral dialogue and diplomacy. Take Vietnam, for example. The government issued contracts for renewable energy by offering attractive feed-in tariffs. However, recent adjustments to these tariffs and other contract terms have raised concerns among investors who had invested based on the original terms, including Singapore-based SP Group and Sembcorp.[6] That said, around the same time, Vietnam’s General Secretary visited Singapore, and the two countries upgraded their economic agreement. Thus, on the surface, Vietnam is strengthening ties, but its policy reversals have been introducing uncertainty, affecting investor trust.

At present, it is up to the investor firms to provide data and demonstrate how the sudden policy reversals affect investor confidence. The goal is to renegotiate terms in a way that allows the project to proceed. This is the reality of doing business in Southeast Asia—balancing sensitivity with practical cooperation.

Q: In Singapore, some PPPs like NEWater are considered successes, while others, such as the Sports Hub, failed. How can conflicts between public interest and commercial goals be managed?

Lim: There’s no universal formula. Challenges are inevitable, and when problems arise, it depends on how stakeholders come together to negotiate and find solutions. Human ingenuity and the willingness to compromise are key to resolving tensions.

Q: What advice would you give to young people interested in entering the PPP space?

Lim: Honestly, it’s not an easy arena to break into. PPPs usually involve large sums of money and complex stakeholder ecosystems making them more accessible to major corporations and governments. For young people, a good starting point is research. Read or undertake case studies of successful and failed PPPs and understand what worked and what didn’t. Building knowledge and expertise in this way can open doors.

Conclusion

PPPs offer a strategic way for governments and businesses to align interests and mobilize resources across borders. Yet as Mr. Lim highlighted, their success hinges on trust, coordination, and resilience in the face of political and economic complexity.

Over the past 30 years, ASEAN integration has advanced steadily, reducing trade barriers and encouraging cooperation among member states.^[7] With its unique position and experience, Singapore is well placed to develop and export effective PPP models, deepening regional ties and contributing to long-term prosperity. But doing so will require navigating uncertainties with care, pragmatism, and diplomacy.

I’m grateful for the opportunity to have interned at CAPRI, an international think tank focused on policy challenges facing the Asia Pacific, which aims to support these forward-looking conversations by bringing together leaders and scholars from the government, business, academia, and civil society.

Alicia Ong was an intern at CAPRI from February to May 2025. A Singaporean national, she earned a Bachelor’s degree in Chinese literature at National Taiwan University.

[1] Kim, Soojin, and Kai Xiang Kwa. “Exploring Public-Private Partnerships in Singapore The Success-Failure Continuum.” Https://Dr.Ntu.Edu.Sg/Server/Api/Core/Bitstreams/37f26d4a-Bf02-4eda-A281-5db1c9c88515/Content. Nanyang Technological University, November 2019. https://dr.ntu.edu.sg/server/api/core/bitstreams/37f26d4a-bf02-4eda-a281-5db1c9c88515/content.

[2] Japan International Cooperation Agency (JICA). “The Study on Public-Private Partnership Scheme for Trans Java Toll Road in the Republic of Indonesia.” Directorate General of Highways Ministry of Public Works, January 2005. https://openjicareport.jica.go.jp/pdf/11844354.pdf.

[3] “Opening Remarks by Minister Gan Kim Yong at a Roundtable on Supply Chain Resiliency With Vice President of the United States Kamala Harris,” August 24, 2021. https://www.mti.gov.sg/Newsroom/Speeches/2021/08/Opening-Remarks-by-Minister-Gan-Kim-Yong-at-a-Roundtable-on-Supply-Chain-Resiliency.

[4] “Singapore’s cross-border deal reveals obstacles of ASEAN Power Grid.” Reccessary, 2024. https://www.reccessary.com/en/news/singapore-s-cross-border-deal-reveals-obstacles-of-asean-power-grid (Accessed: June 18, 2025).

[5] Rana, Deepika. “Acen, GenZero, Keppel Ink Deal for Coal Phaseout.” WBCSD, August 20, 2024. https://www.wbcsd.org/news/acen-genzero-keppel-ink-deal-for-coal-phaseout/ (Accessed: June 18, 2025).

[6] Tran, Jamille. “Singapore’s Sembcorp, SP Group Caught in Vietnam’s Clean Energy U-Turn.” The Business Times, March 13, 2025. https://www.businesstimes.com.sg/international/asean/singapores-sembcorp-sp-group-caught-vietnams-clean-energy-u-turn. (Accessed: June 18, 2025).

[7] “Transcript of Minister for Foreign Affairs Dr Vivian Balakrishnan’s Interview With Financial Times Singapore Correspondent Owen Walker, 7 April 2025,” April 20, 2025. https://www.mfa.gov.sg/Newsroom/Press-Statements-Transcripts-and-Photos/2025/04/20250411-Min-FT-Interview.