Dutch water utility NWB issues EUR500m ($680m), 5yr AAA green bond. And yes they have clear climate-related criteria. Yahoo!!

By Rozalia Walencik and Sean Kidney

Nederlandse Waterschapsbank (NWB), a Dutch bank that lends to public sector and social entities, today announced its first green bond at EUR500m. NWB is rated Aaa (negative) / AA+ (stable). Bookrunners were Rabobank, SEB and HSBC.

The bond had an initial target of midswaps plus 10 basis points. In the end orders were very strong, and after only two hours there were $1.8bn of orders for $680m issued.

Proceeds will be used to finance projects by the (26) Dutch Water Authorities managing the dikes, locks, pumping stations, canals and ditches that supply clear water to homes and businesses in the Netherlands. Projects involved are:


  • Energy reduction and biogas production
  • Reuse of nutrients and other substances
  • Transport and treatment of wastewater


  • Flood protection infrastructure
  • Irrigation and drainage, pumping stations
  • (Re)design of watercourses and wetlands for water storage and discharge


  • Sanitation and dredging and waterbeds
  • Improving water quality

A large part of future investment in flood and water management will be carried out under the umbrella of the "Delta Programme", a scheme set up by the Dutch Government to ensure that the flood prevention and water management programs are in line with expected climate change.

In our NY SEC article a few days ago we explained why water projects are not green by default.

Water infrastructure, for example, is a huge consumer of electricity - for example 17% of California's electricity is used to shift water around the State - so reducing emissions through energy efficiency is important for climate mitigation.

Equally, water supply decisions that ignore climate change, such as some recent dams in Eastern Turkey, can exacerbate water conflicts.

Water investments that don't take into account climate and energy issues can end up being positively harmful, even as they deliver nice clean water.

We argued that NY State Environmental Facilities Corp ‘has a good plan’, and so she should be called a green climate bond. The NWB’s plan is more than good, it’s really, really good! The Water Act of the Netherlands – a main legal reference for eligible NWB financing – mandates integrated water management for urban development planning by local authorities.

The Water Authorities are expected to provide general reporting on eligible projects which will be then summarised in NWB’s annual investor letter, to be published on their website. CICERO did recommend that NWB also report on methane emissions for waste water treatment. Absolutely right – it may look brown, but capture the emissions properly and you have a green bond asset.

A second opinion for the bond (as required under both the Climate Bonds Standard and recommended by the Green Bond Principles) was provided by our good friends at CICERO. Their summary view was that “NWB’s green bond framework is a robust framework for low-carbon, climate-resilient, and climate-friendly biodiversity investments”.

Congratulations to all involved!