APG Works With Government and Participates in Second Dutch Green Government Bond
Posted on 10/23/2023
This week the State of the Netherlands has issued its second green bond. This issue has a particular focus on water-related investments, with proceeds earmarked, for example, for the Dutch Delta Fund. APG’s Government Bonds investment team met with members of the Dutch State Treasury Agency (DSTA) in the weeks leading up to the launch to find out more about the deal and discuss the terms. APG Asset Management, which has participated on behalf of its pension fund clients, has invested €600 million.
In 2019, the Netherlands was the first country with a triple-A rating to issue a green bond. “The Dutch government’s second issue and revised green bond framework reflect its support for the green bond market as a means to promote sustainable development and contribute towards the Paris Agreement goals,” says APG Asset Management Senior Portfolio Manager Treasuries, Kim Liu. “The EU Taxonomy also plays a key role in steering capital to meet the objectives of the European Green Deal and in improving transparency to help investors identify investments that make a substantial contribution to the EU’s climate and environmental objectives.”
This new bond has an initial issue size of €4.98 billion, is a 20-year green Dutch State Loan (DSL) and was over 3.5 times oversubscribed. In the run up to the bond’s launch, the DSTA had meetings with a number of investors, including APG.
In September 2023, the Dutch government published its updated Green Bond Framework.
The use-of-proceeds expenditure covers projects in four eligible green categories: renewable energy, energy efficiency, clean transportation, and climate change adaptation and sustainable water management. Liu adds, “The framework is aligned with the International Capital Market Association’s (ICMA) Green Bond Principles and Moody’s second-party opinion concludes that it demonstrates a high overall contribution to sustainability. More importantly, it also meets our (and our clients) requirements, with a designated use of proceeds that creates a positive impact.”
According to figures from the Dutch central bank (DNB), The Dutch green bond market has doubled in size since October 2020, reaching €122.9 billion (end July 2023), up 21% from a year earlier.
Keywords: Stichting Pensioenfonds ABP.
