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Blue bonds: what they are, and how they can help the oceans

Blue bonds: what they are, and how they can help the oceans

Innovative financial solutions will be required to enhance ocean and coastal resilience. Blue finance, in particular blue bonds, have huge potential to help surmount these challenges. Blue bonds are an innovative ocean financing instrument whereby funds raised are earmarked exclusively for projects deemed ocean-friendly.

The Republic of Seychelles last year, launched the world’s first sovereign blue bond raising a total of $15 million to advance the small island state’s blue economy. The World Bank helped design the bond and vice president and treasurer Arunma Oteh said the blue bond was “yet another example of the powerful role of capital markets in connecting investors to projects that support better stewardship of the planet”.

Since then, Nordic Investment Bank, the international financial institution of the Nordic and Baltic countries, launched a “Nordic-Baltic Blue Bond” in January raising SEK2 billion for projects such as wastewater treatment, prevention of water pollution and water-related climate change adaptation.

Last April, Morgan Stanley, working with the World Bank sold $10 million worth of blue bonds with of the aim solving the challenge of plastic waste pollution in oceans.