Green Funds Scheme

Green investments, a tax incentive scheme enabling individual investors to put money into green projects that benefit nature and the environment. Individuals who invest in a green fund or save money with financial institutions practicing ‘green banking’ receive a lower rate than the market interest rate, however this is compensated by a tax incentive. In return, the banks charge green projects a lower interest rate. Banks require a certificate for applicable green investment projects . The objective of the scheme is to encourage projects that have a positive impact upon nature and the environment but that do not come into being as a result of their low yield or high risk. The scope of the scheme covers new – and hence risky – but not yet standard technology and methods that will protect the environment to a large degree, that exceed the statutory standards and for which the introduction of their application encounters obstacles of a financial and economic nature. New technology or methods refers to technology and methods that have less than 5%-10% application so they are located between the development phase and the (very) limited application phase. The financial sector is more reticent when it comes to making investment capital available for projects where innovative technology or methods are applied than it is in respect of investments in standard technology and methods. This is because innovative technology or methods have not yet been used in practice for an extended period (and are consequently not tried and tested). Moreover, relatively high investment costs and technical and economic risks are at issue. This scheme sees capital from private savers and investors made available for financing high risk projects that will benefit environmental and nature policy and which would otherwise not be undertaken.

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