Blue bond

Blue bond-is a debt instrument which is issued by the government, development banks and the
others in order to fund the capital from investors to finance marine as well as ocean based
projects that have positive environmental, economic and climatic benefits. Blue bonds are an
innovative concept that is inspired by the green bond to support and ensure the sustainable use of
the oceans resources. Blue bond has a relatively low volume in market terms.

Purpose

The main purpose of blue bond is to protect the oceans resources as the marine resources have
become exploited to a great extent and since sustainability is also a great issue. Blue bond is an
initiative by the World Bank that aims to improve the management and the conservation of
marine areas and to strengthen seafood value chains in the Seychelles. Blue bonds will allow
people and the economies to benefit from a healthier marine environment and increased food
security. Blue bonds are implemented to fund and improve the management and preservation of
fish stocks, protect and restore the coastal ecosystems that are mangroves, tidal, marshes and sea
grasses for climate change mitigation and adaptation.

By whom was Blue bond initiated and why?

The Blue bond was initially issued by the Republic of Seychelles as they launched the World’s
first sovereign blue bond, a pioneering financial instrument that was designed to support
sustainable marine and fisheries projects. It was privately placed with three socially responsible
impact investors based in the United States, namely Calvert Impact Capital, Nuveen, and
Prudential. The placement agent is Standard Chartered Bank and the trustee is the Bank of New
York. As the main beneficiaries of Blue bond are the Seychellois whose livelihoods are
dependent on marine resources and the ocean thus this bond will help sustain marine resources.
Seychelles, an Indian Ocean archipelago off the East African coast, plans to offer so-called blue
bonds, which fund the development of sustainable fisheries, to investors

Importance of Blue Bonds

1. Facilitating climate adaptation- Since Fiji is affected by floods and cyclones, blue bonds
can be used to adapt ways to minimize flood and other disasters such as developing flood
protection and disaster management systems
2. Conserving marine and fresh water ecosystems- Blue bonds would help Fiji by
financing sustainable development in oceans and along the coastline by mainstreaming
emerging ocean industries such as sustainable fisheries and aquaculture and driving
investments towards building a blue economy.
 3. Higher efficiency in Rural and Urban water resources- Blue bonds would help Fiji to
boost the efficiency of water resources by raising the bar for transparency and efficiency
in water projects and channelizing capital to projects with the lowest water footprint.
4. Improving and expanding fresh water sources- Since some people in Fiji do not have
access to clean water sources, blue bonds will help in financing the conservation and
expansion of fresh water sources through water capture and storage infrastructure,
wastewater management and clean-up projects.
5. Improving productivity of Agriculture- Blue bonds can be used to raise capita towards
developing effective irrigation mechanisms geared to conserve water, adopting new
technologies and customizing sustainable practices.
Is Blue bond internationally recognized?

Yes, blue bond is internationally recognized as it was initially launched in Seychelles to improve
the sustainability and utilization of marine resources. Since Seychelles and pacific island nations
are dependent on the oceans resources. The sovereign blue bond was issued with a ceiling value
of US$15 million, with a maturity of 10 years. The blue bond, as well as the program of marine
and ocean-related activities it will support, was prepared with assistance from the World Bank
and the Global Environment Facility. The development of the blue economy is fully aligned with
the Bank’s support for implementing the Sustainable Development Goals, notably SDG14, and
meeting our corporate twin goals in a sustainable way. Healthy oceans provide jobs and food,
sustains economic growth, regulate the climate, and support the well-being of coastal
communities.

The World Bank’s active Blue Economy portfolio is estimated at around $3.7 billion, with a
further $1.5 billion in the pipeline. Projects range from implementing large regional fisheries
programs in Africa and the Pacific, to tackling all sources of marine pollution, protecting critical
marine habitats and supporting coastal development worldwide. In August, the World Bank
announced the launch of a Sustainable Development Bond series that will raise awareness on the
critical role of ocean and fresh water resources.