Netherlands to be first AAA-rated issuer of green bonds

The Dutch state is to issue green bonds as of 2019, Wopke Hoekstra, the finance minister has announced.

This would make the Netherlands the first AAA-rated country to issue government bonds aimed at financing sustainable investments.

In a letter to parliament, Hoekstra said the country could spend between €3.5bn and €5bn annually on green investments, such as railway infrastructure, energy saving projects, and the development of sustainable energy.

He also cited the Delta fund, aimed at protecting the Netherlands against the effects of climate change, including flooding and the provision of fresh water.

According to Hoekstra, issuing green bonds was not only feasible but also desirable, as the Dutch treasury supported the development of a solid green capital market, and institutional investors had shown a need for sustainable investment opportunities.

“Investors increasingly want to take a stake in sustainable projects. But for safe green government bonds, they have to diverge to foreign players,” argued the minister.

He also said that the Dutch government wanted to set an example by issuing green bonds and to be transparant about the results.

Within the euro-zone, Belgium, France and Ireland have already successfully issued green government bonds, with Dutch pension funds participating in all of them.

Last year, the large Dutch asset managers APG, PGGM and MN subscribed for a combined amount of €967m of French green bonds, with one-fifth of the issued bonds in total being purchased by Dutch investors.

Earlier this year, the €414bn civil service scheme ABP took a €360m stake in green bonds issued by Belgium and €110m in Irish green government paper.

The pension fund has targeted €58bn of sustainable investments by 2020.

Dutch companies and banks have issued €15bn in total in green bonds.

Hoekstra said a framework had to be designed and subsequently checked against the international standard of the Green Bond Principles.

He added that he would provide details such as scale, duration and an issue date later.