The bond for low-carbon development and sustainable water management will finance infrastructure solutions in one of the world’s lowest-lying countries.
Observers say enthusiasm for the issue – the government received €21bn worth of orders – signals a shift in conservation finance from a niche market to a mainstream investment strategy.
The Netherlands is naturally vulnerable to climate change because much of the country has historically been below sea level and has been protected by dikes, levees and sea walls.
Serious floods periodically inundate inland areas causing extensive damage and loss of life, and the Dutch have become world leaders in finding engineering solutions.
Its green bond will fund a range of low-carbon projects but its focus is on sustainable water management – especially the use of “natural infrastructure” approaches to reduce flooding risks in coastal and low-lying areas.
It was certified by the Climate Bonds Initiative, which uses robust standards that have become a leading framework for green bonds, and followed its Water Infrastructure Criteria.
The Netherlands has been a pioneer of the use of natural infrastructure to address the challenges posed by rising water levels.
Under its Room for the River programme, rather than building ever higher levees to confine rivers to narrow channels, natural river floodplains were restored by pushing back dikes and digging new channels.
In the province of South Holland, erosion of sand dunes and shoals on the Delfland Coast that put inland areas at risk of flooding was addressed by engineers through “sand nourishment” – replacing lost sand with material dredged elsewhere.
The Dutch Ministry of Infrastructure and Water Management developed a giant “Sand Motor” that mimics the natural movement of dunes to continually replenish the sand while providing sea defences.
The Netherlands is also something of a pioneer in modern finance of this kind – and was the first country in the world to issue government bonds when banking was in its infancy in the 16th and 17th centuries.
