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WHAT JUST HAPPENED?
The Republic of Seychelles on October 29, 2018 launched the world’s first Sovereign Blue Bond, a financial instrument designed to support sustainable marine and fisheries projects. The bond raised USD 15 million from international investors. The bond demonstrates the potential for countries to harness capital markets for financing the sustainable use of marine resources. With this, Seychelles became the first nation to pioneer such a novel financing instrument.
ASSISTANCE AND INVESTORS
The World Bank assisted in developing the Blue Bond and helped the country in reaching out to the three investors: Calvert Impact Capital Nuveen U.S. Headquartered Prudential Financial Inc.
MAIN POINTS OF THE BLUE BOND
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- The Blue Bond is a part of an initiative that combines public and private investment to mobilise resources for empowering local communities and businesses.
- Proceeds from the bond will be utilised for the expansion of marine protected areas, improved governance of priority fisheries and the development of Seychelles’ blue economy.
- Proceeds from the bond will also contribute to the World Bank’s South West Indian Ocean Fisheries Governance and Shared Growth Program, which supports countries in the region to sustainably manage their fisheries and increase economic benefits from their fisheries sectors.
THE CREATION OF BLUE BOND
- The Seychelles blue bond is partially guaranteed by a USD 5 million guarantee from the World Bank (IBRD) and is further supported by a USD 5 million concessional loan from the Global Environment Facility (GEF) which will partially cover interest payments for the bond.
- A World Bank team comprising experts from its Treasury, Legal, Environmental and Finance groups worked with investors in structuring the blue bond.
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