Green OLO - Additional information

With the aim of actively contributing to climate change mitigation and environmental protection in Europe, the Belgian Debt Agency will be dedicating the proceeds of this green OLO to the transition to a sustainable economy. More precisely, five sectors will be alimented by the proceeds of this transaction: clean transportation (85%), living resources and land use (8%), renewable energy (3%), circular economy (2%) and energy efficiency (2%). The largest budget will be dedicated to mobility and transportation with a total amount of EUR 2.2bn to be invested in the domestic passenger transport by ordinary service trains for the benefit of SNCB and railway investment.

As an OLO, proceeds will be managed in compliance with the general budget rule and finance an equivalent amount of Eligible Green Expenditure. In practice, the proceeds of the Green OLO will be managed like those of a conventional OLO, but the allocations to Eligible Green Expenditure will be tracked and reported. For the five green sectors previously mentioned, investment expenditures, operating expenditures and tax expenditures are eligible. In this way, the Green OLO follows the Green Bond Principles and best market practices.

The Green OLO will perfectly fit the OLO curve; the BDA will tap the Green OLO after the initial issuance to maintain its liquidity, as it does for conventional benchmark OLOs. Consequently, the outstanding amount of the Green OLO will be increased by successive tap issues. The proceeds from tap issues will also be matched to Eligible Green Expenditure, as the cumulative amount of such expenditure rises over the coming years.

The Green OLO Framework obtained a “Second Party Opinion” by Sustainalytics, dated 6th February 2018. Sustainalytics is of the opinion that the Kingdom of Belgium’s Green OLO Framework is transparent and credible and aligns with the four pillars of the Green Bond Principles 2017. In addition, the Kingdom of Belgium is committed to provide two levels of reporting of the use of proceeds: on the one hand, the management and allocation of bond proceeds that will be reviewed by an independent audit firm and on the other hand, the assessment of environmental impact of Eligible Green Expenditures.