The State of the Netherlands will issue a green bond next year. On the basis of a feasibility study, Dutch Finance Minister Wopke Hoekstra concluded that issuing a green sovereign bond is possible and desirable. Minister Hoekstra explains this in a letter sent to Parliament today.
Green bonds are bonds (loans) whose proceeds are intended for sustainable – ‘green’ – expenditures and investments. With the issuance of a green bond, the Ministry of Finance underpins the importance of the further development of a robust green capital market. Especially institutional investors such as the Dutch pension funds are looking for green investment opportunities.
Minister Hoekstra explains: “Investors increasingly want to invest their capital into sustainable projects. Up till now, Dutch pension funds, insurance companies and banks looking for green investments in safe sovereign bonds had to look abroad. I have decided to issue a green bond because I think sustainable investments and a further boost to the green capital market in the Netherlands are important goals. The green bond will represent a solid asset for any green portfolio. This will allow investors to diversify their green portfolios and help to further develop the domestic green capital market.”
The feasibility study initiated by the Minister shows that within the government budget between 3.5 to 5 billion euros each year can be earmarked as ‘green’. Examples of green expenditures are railway infrastructure, energy efficiency, the development of renewable energy and the ‘Delta Fund’.
The Netherlands is expected to be the first country with a triple-A-rating to issue a green bond. The green bond will be placed in the market by the DSTA in 2019. More detailed information on the green bond will be presented at the annual Outlook event hosted by the DSTA on 14 December. (Source: DSTA)