> Prestige, signalling, membership to exclusive club, etc dominate the consideration.
So? These _benefits_ also fit into a bog standard cost/benefit analysis. For example, Singapore would need to weight this project against buying everyone a luxury handbag..
Btw, in any case keep in mind that the project is privately financed and will make money selling electricity to Singaporeans. The electrons that power my gadgets at home don't have any colour, so I can't even tell if my electricity comes from a particularly prestigious source. It's all intermediated by the wholesale market.
> Reserves are cash in hand and represent immediate and hard spending power.
That's about on the same level as arguing that having a money printing press represents raw spending power.
Most central banks around the world conduct monetary policy via domestic interest rates and affect these interest rates by buying and selling domestic government bonds. Thus they will have lots of government bonds on their balance sheet. But it doesn't mean that they can just take these bonds and use them to buy solar farms.
The Monetary Authority of Singapore is (almost?) unique in foregoing interest rate as a channel of monetary policy, and instead working via the foreign exchange rate. They affect the foreign exchange rate by buying foreign currencies via freshly minted Singapore dollars (or selling them to remove Singapore dollars from the market).
And just like the American Fed keeps the government bonds they buy on their balance sheet (and pretty much has to!), our Monetary Authority of Singapore keeps the foreign currency on the balance sheet, and they show up as reserves.
By design, Singapore has at least as much in foreign exchange reserves as we issued domestic currency.
In a sense, most of the eg Euros in our reserves are already 'spent', but they are spent in the form of SGD in circulation. (I say 'most', because we have more reserves than we issued SGD. Singapore is cautious like that.)