Country pioneers new finance instrument to support sustainable marine and fisheries projects.
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Finance tools have become a popular means for promoting eco-friendly ventures. Uruguayan shoe brand MAMUT, for example, accepts plastic bottles as payment to encourage local beach clean-ups. Similarly, Caaapital is an online platform that connects investors with renewable energy projects in Latin America.
The Republic of Seychelles has launched the world’s first sovereign ‘blue bond’ to finance the development of its blue economy. Planning was overseen by the World Bank and Global Environmental Facility. The blue bond is a debt instrument that taps into capital markets to fund sustainable ocean solutions. In Seychelles’ case, the USD 15 million raised will go towards the expansion of marine protected areas (MPAs), stock rebuilding and climate awareness campaigns. The bond will also support the World Bank’s South West Indian Ocean Fisheries Governance and Shared Growth Program, or SWIOFish3. SWIOFish3 aims to improve the management of marine areas and strengthen value chains in fishery products.
This is not the first time Seychelles has used impact investment to link marine conservation with economic opportunity. In February, they agreed to ‘swap’ foreign debt for a USD 22 million investment in marine conservation.
The costs of transitioning to sustainability can be heavy for a small island state whose economy depends on marine resources. Seychelles’ graduation to high-income country status in 2015 also removed access to grants and donor aid. A sovereign blue bond ‘will greatly assist Seychelles in achieving a transition to sustainable fisheries, says Vice-President Vincent Meriton. The bond also ‘combines public and private investment to mobilise resources for empowering local communities and businesses’. It is hoped that Seychelles’ blue bond will provide a model for other small island developing states and coastal regions.