Presented by Frenk van der Vliet, Director at (NWB) at the IRC event on 3rd June 2015 Financing the Dutch water sector; the experience of the Nederlandse Waterschapsbank (NWB)

1. FINANCING OF DUTCH
WATER SECTOR
3 JUNE 2015
FRENK VAN DER VLIET

2. 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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3. 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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4. 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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5. VALUE CHAIN NWB BANK
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6. 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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7. 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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8. 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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9. 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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