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Dutch asset managers positive ahead of sovereign green bond debut

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Dutch asset managers have indicated having a positive stance on the green bonds their sovereign is due to issue tomorrow in its debut in the asset class.

According to the Dutch Treasury’s Finance Agency, the green bond will have a 20-year maturity and a target volume of between €4bn and €6bn, to be increased to at least €10bn within the coming years.

It said that the funds raised would be invested in sustainable energy and rail transport, energy efficiency and climate change adaptation, and that it had committed to reporting about the allocation of the proceeds as well as the achieved impact. 

The planned issuance would make the Netherlands the first triple A-rated sovereign to issue a green bond, and the second-largest sovereign issuer of the instrument.

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Bram Bos, lead portfolio manager green bonds at NN Investment Partners, said the asset manager welcomed the green bond issuance, “in particular as we view this as the first liquid sovereign bond with these [stringent requirements for reporting and transparency]”.

NN IP was one of the stakeholders the Dutch government consulted in determining the eligibility of projects to be financed by the bonds’ proceeds.

Bos said he expected the Netherlands to raise €6bn given investors’ recent interest in green bonds.

“We anticipate positive knock-on effects from this green bond issuance, as it is likely to prompt other Dutch players to start issuing green bonds,” he added.

Dutch property investor Vesteda, a privatised offshoot of civil service pension fund ABP, is eyeing further green bond issuance after last week meeting with strong demand for a €500m deal

Asset manager PGGM also indicated that it was interested in participating in the sovereign’s green bond, although not at any price.

“It must enable us to achieve sufficient returns,” said Maurice Wilbrink, its spokesman.

APG has also made positive comments about the sovereign’s green bond.

“With its long duration, high quality and strong sustainable component, this kind of deal is a perfect match for us,” Sandor Steverink, managing director for government bonds at APG, is quoted as saying in Dutch financial daily Het Financieele Dagblad.

‘Dark green’ 

Wopke Hoekstra, the Dutch finance minister, had said that investments would be “dark green”, and that its targets would also include thermal insulation of property and flood defences for the country – much of the Netherlands lies below sea level.

The Dutch strategy to reduce the country’s carbon footprint is aimed at a 49% reduction by 2030, compared with the EU’s target of 40%.

The country’s green bond framework is certified by the Climate Bond Initiative (CBI). Sustainalytics has also assessed it as an independent expert, and found it matched the core elements of the Green Bond Principles of the International Capital Market Association.

In the euro-zone, France and Belgium have raised €16.5bn and €5.7bn via green bonds, respectively. 

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  • Afsluitdijk, Netherlands

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