FINANCING OF DUTCH WATER SECTOR 3 JUNE 2015

FRENK VAN DER VLIET

WHO WE ARE AND WHAT WE DO

NWB Bank - Nederlandse Waterschapsbank

Bank for the Dutch public sector established in 1954 by Dutch Water Authorities

Mission: To finance the Dutch public sector as cheap as possible (not there for profit maximisation)

Balance sheet €88 bln, net profit €49 mln;

Ratings: S&P/Moody’s AA+/Aaa (same as government)

Funding vehicle

81% owned by Water Authorities, 2% Provinces and 17% Dutch State

Credit exposure 100% to Dutch government

Never a default on a loan

Lean and mean organization (only 50 fte)

Other public sector banks in Europe are e.g. KfW (Germany), Kommuninvest (Sweden), Munifin (Finland) and Agence France Locale (France)

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ESTABLISHMENT OF ‘WATER BANK’

Water Authorities are decentralized public authorities based on the Constitution (similar legal status to municipalities) Responsible for the flood control, water quality, water quantity and treatment of urban wastewater Receive on average 5% of their revenues from the government and the rest from taxes they are allowed to levy (which improves their creditworthiness) The mandate of the Water Authorities is laid down by law (“Waterschapswet”) In 1950 there were around 2600 Water Authorities, due to mergers there are now 23 left covering the whole of the Netherlands Due to large number and increasing financing needs, there was a need for their own bank. Elsewhere there was less financing available and the costs higher… …. hence NWB Bank was set up in 1954

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OWNERSHIP STRUCTURE

Ownership structure

Memorandum and Articles of Association state that only the Dutch State

and other public legal entities can be shareholders of NWB Bank

81%

17%

2%

Water Authorities

Dutch State

Provinces

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VALUE CHAIN NWB BANK

5

64% 8%

16%

2% 10%

Social Housing

Healthcare

Municipalities

Water Utility

Water

Authorities

LOAN PORTFOLIO

Majority of funding Water Authorities is provided by NWB Bank

However nowadays only 10-12% of the loan portfolio is water

related

Total financing Water Authorities: €6.5 bln, Water utility: €2.8 bln

Respective market share NWB Bank: 83% and 11%

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PROJECT EXAMPLES

Dikes

The polder Krimpenerwaard lies below

sea level. Dike enforcement is a

continuous process.

Biodiversity

Structure of the ecological network,

including watercourses and wetlands

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PROJECT EXAMPLES

Wastewater treatment

New technologies in treatment of

wastewater at the lowest possible cost

to society.

Drainage: Pumping stations

Drainage has a long history in The Netherlands –

UNESCO heritage pumping station is from 1920 and

the only steam pumping station in the World.

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KEY SUCCESS FACTORS

Focus (on Dutch public sector only and just

lending no other banking services)

High credit quality clients (i.e. never a default

on a loan), almost all loans are either to, or

guaranteed by local authorities….

….resulting in highest credit ratings and hence

low funding costs

Strong shareholders

Lean and mean organization resulting in low

cost base

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