Green bonds are bonds where the proceeds are allocated to green projects according to the Green Bond Principles of the International Capital Market Association (ICMA). The proceeds of sovereign green bonds are allocated to green government expenditures.

The Dutch Minister of Finance announced that the issuance of a green bond by the Netherlands is possible and desirable and that the DSTA will therefore issue a green DSL in 2019. The green DSL will have a long tenure (at least 15 years). With the green DSL, the Minister wants to reach out to institutional investors with a green focus. This includes Dutch pension funds and insurers that so far have been large investors in green bonds of other European sovereigns. With the Dutch green DSL the Minister of Finance aims to contribute to the further development of (a Dutch) green financial market.

The proceeds of the green DSL can be allocated to green expenditure of the budgetary year preceding the year of issuance, the year of issuance and future budgetary years. The DSTA has identified between EUR 3.5 and 5 bn of annual green expenditure that can qualify for a green bond. Expenditure categories that are likely to be included relate to renewable energy, energy efficiency, clean transportation and climate change adaptation. The DSTA is committed to issue approximately € 4-6 bn in the green DSL in 2019. Within a few years after the initial issuance the bond will be tapped to a benchmark size of approximately € 10 bn, as is regular practice for longer-dated DSLs.