Netherlands government to issue green bonds in 2019

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The Dutch government is planning to issue green bonds next year. In a letter sent to the country’s House of Representatives, Dutch Minister of Finance Wopke Hoekstra said the bonds will generate proceeds for sustainable investments, and he expects institutional investors such as Dutch pension funds will  back the funding vehicle.

“If Dutch pension funds, [insurance companies] and banks … want to invest in safe green government bonds, they must [currently] rely on foreign providers,” Hoekstra said. “As I believe sustainable investments are important and want to boost a green capital market in the Netherlands, I have decided to issue green government bonds.”

The minister said between €3.5 billion and €5 billion could be raised through the bonds every year. He claimed the Netherlands will be the first country with a triple A rating to issue a green government bond. Further announcements are expected in mid-December.

Netherlands is following global trend

Green bond financing is an option that has received increasing attention on a global scale. In early October, around €1 billion in green bonds were issued on the Luxembourg Stock Exchange through the Luxembourg Green Exchange (LGX), a new platform for sustainable investment created by the exchange after the COP21 climate change agreement.

Several Latin American markets saw green bonds launched in the summer. Plans for solar energy bonds have also recently been announced in Colombia, Brazil, Peru, Uruguay, Argentina and Chile.

Dutch-German transmission operator Tennet Holding BV launched a €1.25 billion green bond program in May. In April, the Taipei Exchange approved a plan from state-owned utility Taipower for the sale of $82 million worth of green bonds, to be sold on the open market from mid-May.

However, UK Energy Minister Claire Perry this week shot down suggestions for local green bonds to help authorities encourage renewable energy, stating there was nothing to prevent councils financing such schemes without such central government support.