Groenbank: the gateway to low-interest loans for sustainable projects

Those looking to invest in sustainable projects often want to secure sustainable financing as well. ABN AMRO’s Groenbank provides just that. Krista Overwater, Manager Groenbank, talks about which potential clients could benefit the most.

A new wellness centre, a sustainable hotel not connected to the gas mains, the owner of an office building who wants to install solar collectors on the roof – all these are examples of potential loan applications currently being processed by ABN AMRO’s Groenbank. 

Any entrepreneur with an investment proposal and Green Accreditation (or Groenverklaring, issued by the Dutch authorities) is eligible for this type of low-interest loan. The investment should be in a sustainable, innovative or environmentally friendly project. Krista Overwater says, “We’re seeing projects of all sizes in a range of sectors – from investments of just a few hundred thousand euros to projects with financing needs in excess of EUR 15 million.”

Tax benefit

Clients taking out a loan from Groenbank normally pay a lower interest rate than they would on a standard loan as long as the underlying project is awarded Green Accreditation. The loan application should clearly describe the sustainable or environmental impact that the project will have. Groenbank may request to see the relevant documentation when the application is submitted. Accreditation allows entrepreneurs not only to benefit from a lower interest rate on their loan, but also in some cases to enjoy tax benefits like the accelerated depreciation of environmental investments and the environmental investment credit.

Easier, more rewarding

Overwater says Groenbank can help ABN AMRO clients achieve their sustainability objectives. “We can advise potential clients applying for a loan on how they can design their project to meet all the green requirements. And we take the process of applying for all necessary documentation off their hands. We’re seeing in the market a steady increase in the intrinsic motivation for businesses to make this type of investment. Groenbank helps clients invest sustainably by making it easier and more rewarding for them.”

A green savings account

It’s a two-way street, Overwater says, since the financing Groenbank provides is generated in accordance with green principles by MoneYou, another ABN AMRO subsidiary. Overwater says, “Private individuals will be able to deposit a portion of their savings with us in a green savings account. This green savings facility gives them an additional tax exemption of just over EUR 57,000 on their taxable income from savings and investments – or double that amount if they have a partner for tax purposes. These savers will also be eligible for an additional tax credit on their total green savings balance. We think many clients will want to take advantage of this double tax benefit.”

Both individuals and entrepreneurs reap the rewards

In order for a savings account to be considered green, ABN AMRO must invest the capital in sustainable initiatives. “At least seventy per cent of this capital is invested in sustainable or innovative projects,” Overwater explains. “Here, too, Groenbank has an advantage, since the loans we grant are funded by green savings accounts. It really is a win-win situation. Private individuals can invest a portion of their assets sustainably, enjoying significant tax benefits at the same time. The interest income on green savings deposits may be lower than on ‘normal’ ones (0 per cent), but that’s more than offset by the tax benefits. That lower interest rate also means we can lend the funds in savings to entrepreneurs on favourable terms. They, in turn, benefit not only from that ‘discount’, but in some cases from the previously mentioned green investment benefits, too.”

Want to learn more?

Clients who would like to know more are invited to contact their relationship manager.