Dutch move to increase institutional investment in local economy
The Dutch Cabinet has said it is willing to launch a National Investment Institute (NII) responsible for coordinating the supply and demand of long-term financing in a bid to encourage institutional investment in the local economy.
The announcement – made by King Willem-Alexander during his Budget speech – followed consultations between the Ministry for Economic Affairs and the pensions and insurance sectors.
In a letter to Parliament, Henk Kamp, minister for economic affairs, said the NII would select and assess individual projects, as investors would lack the necessary manpower and expertise.
In his first Budget speech, the king cited “suitable projects” for investments in healthcare, energy, school buildings and infrastructure.
Under the terms of the proposal, the Cabinet will not guarantee investments through the NII or make funds available for individual projects.
However, Kamp said the government would pay for the NII’s initial organising costs.
He said the NII had also brought the founding of a National Mortgage Institute (NHI), which would issue government-backed mortgage bonds, one step closer to reality.
A committee chaired by Tjerk Kroes, APG’s strategy and policy director, has lobbied for such an institute, provided it is not at odds with EU law, and that financial risks are “acceptable”.
In the opinion of the committee, the NHI should have capital of its own.
The Pensions Federation has responded positively to the initiative, noting that Dutch pension funds have already invested €135bn – approximately 14% of their combined assets – locally.
The €292bn civil service scheme ABP reiterated that it would commit itself to investments as soon as fleshed-out proposals were presented.
Henk Brouwer, ABP’s chairman, said: “ABP does acknowledge its social responsibility. If we can contribute to boosting the Dutch economy through investment in NHI bonds, that would be excellent.”