07-10-2010
Green investments and green finance in the Netherlands
Huub Keulen,Rabo Groen Bank BV
Rabo Groen Bank B.V.
Contents
• Rabobank and Corporate Social Responsibility (CSR)
• Green investments• Green finance• Bottlenecks/opportunities• Conclusion
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Rabobank en CSR (1)
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Sustainability is moving to the core of the policy of an increasing number of companies. These days good companies make money
with ‘Green’.’
‘It is in our gens.’ _
Piet Moerland, Chairman Management Board Rabobank Group
Rabobank and CSR (2)• Together you achieve more then alone• Linked with the environment of the customers• Sustainable development of the society: triple P
People, Planet, Profit
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Green Funds Scheme
• 1995: introduction Green Investment Scheme Dutch Govt.• Goal: encouraging green initiatives• Means: tax incentive private individual investors.• Cheap green finance for acknowledged green projects
based on green certificate of the government• Rabobank market leader green investments: invested
capital 31-12-2009: € 4 billion
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Public-private cooperation
ConsumersConsumers
BanksBanksCompaniesCompanies
GovernmentGovernment
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Parties involved
• Government: Green scheme with tax incentive for individual investors• Consumer: green investment yields interest from green bank & tax
incentive from government• Bank:
- acquiring money against lower funding costs- application green certificate for projects with government - supplying low interest loans for certified green projects
• Government: assesment of application green certificate• Companies: low interest loans for green projects
Purpose Green Scheme: encouraging green initiatives
Extra benefits: involvement banks and individual investors (civilians) with green projects (awareness)
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Period 5 year Market rate Rabo Green Bond
Interest 4,0 % 2,0 %
Wealth tax 1,2 % n/a
Subtotal 2,8 % 2,0 %
Discount income tax n/a. 1,3 %
Net result 2,8 % 3,3 %
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Tax incentive
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Benefits Rabo Green Bonds• Tax incentive
(2,5% max. € 50,000 per individual)
• Fixed interest• Guarantee on principal amount• Certainty
But also:• Supporting the environment
and being socially responsible = feeling good
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Rabo Green finance in mio €
On 31.12.2009 total € 3.17 billion
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Green label greenhouses
€ 2,302
Windenergy€ 222
Organic farming€ 211
Forestry and nature€ 175
Sustainable construction
€ 79
District heating
€ 14
Other sustainable energy
€ 18
Other projects€ 147
Green finance process (2 months)
• Projects from Rabobank network• Application for green certificate by Rabo Green Bank • Assesment of application by appointed evaluation organizations
(SenterNovem & Dienst Regelingen)• Issue green certificate by government• Loan proposal Rabo Green Bank• Issue green loan Rabo Green Bank
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General project requirements
• Project situated in:- the Netherlands- Netherlands Antilles- non-OECD country (Asia, Africa, South America)
• Project provides significant and immediate environmental benefit• New project
(application green certificate within 6 months after start up)• Minimum € 25,000 Max. € 35 million• Amount green certificate based on investment in fixed assets• Prove of actual investments: contract supplier/contractor • Different requirements depending on type of project
(about 50 designated project categories)
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Green themes
• Forestry and nature• Organic Farming• Sustainable agriculture (greenhouses, sustainable dairy farms)• Recovery en reuse (innovative recycling) • Renewable energy (wind, solar, water, geothermal)• Energy saving • Sustainable building (new & renovation; houses and officebuildings)
Sustainable mobility (transport)• Sustainable water chains (water treatment, water collection &
retention)• Other innovative projects
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Green Finance
• Amount loan = amount green certificate• Term green loan = term green certificate (mostly 10 years)
interest reduction over same period• Repayment = economic depreciation• Regular loan assesment by Rabobank
(project has to be cost-effective)
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Incentive Green loan
• 1 – 1,5% average interest reduction • Compliment for the entrepeneur
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‘The Green Funds Scheme is unique in the world. Many sustainable project have been stimulated through this scheme. Continuity is more important than flexibility, because banks have long term commitments through green finance.’
—Just van Lidth de Jeude, coördinator Technologie ministerie van VROM
Is the Dutch Green Funds Scheme succesful?
Conclusion:Multiplier effect: Dutch government, bynot-receiving income tax, encouragesalmost € 6 billion green investments by companies
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Total Netherlands(7 greenbanks)
Rabobank Market share 54%
Green investments: € 7.36 billion € 4 billion
Investors 233,000 92,000
Green finance: € 5.86 billion € 3.17 billion
Projects 3,900 2,300
Threads & opportunities
Threads• Economic crisis• Windenergy: “not in my back
yard”• Low return in nature and forestry• Assesment of return on
investment by the governmentBank demands: highGovernment demands: low
• Succes green scheme → upgrade requirements by the government
Opportunities• Grown awareness Green
Scheme• Climate targets government• Subsidies Dutch government• Extension Green Scheme• Know-how local
accountmanagers Rabobank
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Conclusion
• Profit for nature & environment• Profit for the individual investor• Profit for green projects• Profit for the bank
• www.rabobank.com• www.annualreportsrabobank.com
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‘Everything should fit. A GreenLabel Warehouse with it’s advantages is a good example.’
Nic de Jong, Bramani
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‘We contribute to a clean city and a sustainable Amsterdam.’
Roelof Kruize, algemeen directeur Afval Energie Bedrijf
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24 Rabo Groen Bank B.V.
Raymon van den Ende, director Yard Capital
‘Wind in the Netherlands: one of the most promising sources of energy.’
28 Rabo Groen Bank B.V.
John van der Hulst, adjunct-director WoonInvest
‘Where possible, we renovate and build sustainable’
29 Rabo Groen Bank B.V.
Gerard Groenen, Kalverhouderij Groenen-Wientjens
‘It was great for years. Hardly no extra heating was needed.’