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Netherlands to issue green bond of up to €6bn on May 21

The government of the Netherlands has confirmed that it will issue its first green bond on May 21, with a volume of between €4 billion and €6 billion.

Plans for the issue were first announced in November, when the government said that it aimed to raise between €3,5 billion and €5 billion annually through green bonds, commencing in 2019.

The Netherlands will issue 20-year bonds and net proceeds of the first issue will be used for sustainable, climate-related expenditure and investment by the government, an official statement confirmed.

The green bond, maturing on January 15, 2040, has been certified by the Climate Bonds Initiative and will make the Netherlands the first country with an AAA credit rating to issue such securities. The offering will be carried out via a Dutch Direct Auction (DDA), which will price the bond on the auction day and no later than May 22. The coupon will be announced on May 17.

Four types of project will be eligible for green bond backing, including large-scale renewable energy projects developed under the Netherlands’ Stimulation of Sustainable Energy Production – aka SDE+ - incentive programme. Bond proceeds can also be used to back energy efficiency projects, clean transportation and other initiatives aimed at mitigating the effects of climate change.

“Eligible green expenditures include expenditures from the entire budget year preceding the issuance, the budget year of issuance and future budget years,” the government announced. “Within a few years after the initial issuance, the bond will be tapped to a benchmark size of approximately €10 billion, as is regular practice for longer-dated [green bonds.”

The Netherlands’ State Treasury Agency stated that it plans to devote up to half the proceeds to expenditure in the budget year of issuance or future fiscal years.

Plans for solar

In March, the government unveiled plans to develop large scale solar projects on its property as part of its agenda for the Energieakkoord voor duurzame groei (Energy Agreement for Sustainable Growth), an accord reached in 2013 with 40 Dutch organizations that is related to energy efficiency, sustainable energy and climate measures.

“We are currently considering the construction of six or seven pilot solar projects with a power range of 80 MW to 100 MW each,” the government said at the time.

In March 2018 water management agency the Rijkswaterstaat – part of the Dutch Ministry of Infrastructure and the Environment –  announced plans to use its water and land surfaces to host photovoltaic (PV) and other renewable energy plants.

The agency has since been engaged in multiple PV projects including a major floating solar project for the port of Rotterdam and solar anti-noise barriers along highways.

Dutch railway network operator ProRail said it would support large scale solar and renewable energy projects on its estate.

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