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Netherlands

Netherlands

A GOOD IMVESTMENT

ABN Amro is introducing a Green Fund which it hopes will attract about NLG 80 million. From 1996, investment in renewable energy qualifies for tax exemption in the Netherlands. A large portion of the investment will be used for a loan to Windpark Eemsmond, built by utility EDON and Kenetech of California. Another green fund was lanced in 1995 by a financial group consisting of Rabo bank and Robeco investment funds. The Wind Fonds, an initiative started by Triodos Bank has yet to be approved.

The largest bank in the Netherlands, ABN Amro, has discovered wind energy as an interesting area for investment. This month it is introducing a Green Fund which the bank hopes will attract about NLG 80 million. In December fund options -- with an expected return of 4.5% -- were being offered for NLG 100 apiece.

From the beginning of this year any investment in renewable energy qualifies for tax exemption. Together with a return of 4.5%, putting money into a green fund thus becomes a better investment than guilt edged bonds, according to ABN Amro.

A large portion of the investment -- NLG 70 million -- will be used for a ten year loan to Windpark Eemsmond, a joint venture built by utility EDON and Kenetech of California, the supplier of the turbines. About 70 of the 94 turbines to make up the 21 MW Windpark Eemsmond were to have been installed by late December with the final completion date expected in the spring.

The ABN Amro Green Fund is one of the first investment funds to profit from the tax exemption regulation. Under the regulation no tax has to be paid if at least 70% of the fund's capital is invested in sustainable projects. The 'green' character of the projects have to be approved by government. Since last January 45 projects have applied for a green status, representing a combined investment value of NLG 325 million.

Another green fund was lanced before Amro's by a large financial group consisting of Rabo bank and Robeco investment funds. They started a similar scheme in October 1995 and in a short period of two weeks drew almost NLG 500 million from investors. Already the group has invested NLG 30 million in four wind farms, the biggest of which is the Kreekrak project of NedWind machines.

Together with the ABN Amro initiative there is now more money than there are green projects available to invest in. For this reason the Dutch secretary of state for finance Willem Vermeend, has extended the time schedule for finding projects to invest in from three months to two years.

While the big banks are drawing green money from investors, the small banks are still out in the cold. The Wind Fonds, an initiative started by Triodos Bank (Windpower Monthly, January 1994) has yet to be approved by the finance department as a green fund -- even though it was this scheme that the green fund law has been modelled on. Triodos bank is expecting government approval in the "very near future."

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