Netherlands Wants to Intro Sovereign Green Bonds in 2019

The Netherlands looks to become the first AAA-rated issuer of green bonds, Wopke Hoekstra, its finance minister, announced in a Wednesday letter to parliament.

Hoekstra said the nation would need to spend between $3.9 billion and $5.7 billion on green investments such as infrastructure, energy conservation, and sustainable energy development projects. The bonds are expected to be issued in 2019.

The minister said these bonds will make for a “a solid asset for any green portfolio,” allowing for greater sustainable diversification and to boost the eco-friendly capital market.”

Hoekstra said before anything can be granted, the Netherlands will have to design a framework, where it will be checked against the international standard of the Green Bond Principles.

He will announce the scale and timing of the green bonds on December 14.

Hoekstra also proclaimed the Dutch government’s issuance of the securities were both “possible and desirable,” as the treasury and institutional investors have expressed interest in them.

The only other countries that currently issue green bonds are Belgium, France, and Ireland. Dutch pension funds, such as the $546 billion APB, and asset managers APG, PGGM, and MN, have bought these securities from each country.

“Investors increasingly want to invest their capital into sustainable projects,” Hoekstra said. “Up till now, Dutch pension funds, insurance companies, and banks looking for green investments in safe sovereign bonds had to look abroad.”

APB wants to hold $66 billion in sustainable investments by 2020.

Dutch banks and companies have issued about $17 billion in green bonds.