Netherlands Sovereign Green Bond

This is the first sovereign green bond with an AAA rating.

Countries in Europe are increasingly interested in issuing sovereign green bonds. This is a welcome development as they act as important signals to various market stakeholders. Previously, Poland, France, Belgium and Ireland have also issued green bonds.

During the first announcement of the green bond programme, the Minister of Finance said, “Our ambition is to issue a dark green bond”.

A large portion of the proceeds will fund the government’s Delta Plan, which is the world’s most advanced and sophisticated floodplain management system, as most of the Netherlands is the Rhine’s floodplain and is very low lying and vulnerable to flooding and sea level rise. This management system will manage the country’s resilience to increasing sea levels as well as fresh water distribution.

The proceeds will also finance and refinance the government’s subsidies for solar energy developments, offshore wind energy developments, the government’s Incentive Scheme for Energy Performance in the Rental Sector (“STEP”), and the government’s investments in its passenger railway network.

32 investors with green credentials were given an additional allocation of up to 10%. 22% of the overall issuance was allocated to such green investors.