The sovereign bond has already raised $15m from international investors. It is the first financial instrument designed to support the ‘blue economy’ – the sustainable development and use of ocean resources for economic growth.
The money made from the bonds will support the country’s protected marine life areas and fisheries.
Marine resources are crucial to the East African country’s economic growth, as fishing is the one of the most important industries, second only to tourism. Fish products make up around 95% of the Seychelles’s total value of domestic exports.
Vincent Meriton, vice president of the Republic of Seychelles, who announced the bond at the Our Ocean Conference in Bali yesterday, said: “We are honoured to be the first nation to pioneer such a novel financing instrument.
“The blue bond, which is part of an initiative that combines public and private investment to mobilise resources for empowering local communities and businesses, will greatly assist Seychelles in achieving a transition to sustainable fisheries and safeguarding our oceans while we sustainably develop our blue economy.”
The bond is similar to green bonds, where the proceeds are used to meet climate commitments and invest in green projects.
Some of the proceeds will also go to the World Bank’s South West Indian Ocean Fisheries Governance and Shared Growth Programme, which supports countries in the region manage their fisheries and increase the economic benefits from them.
The World Bank helped develop the bond and attract initial investments. The blue bond is also partially guaranteed by a $5m guarantee from the World Bank.
Arunma Oteh, World Bank vice president and treasurer, said: “We hope that this bond will pave the way for others—much like the World Bank’s first green bond catalysed the green bond market 10 years ago.
“The blue bond is yet another example of the powerful role of capital markets in connecting investors to projects that support better stewardship of the planet.”
Read PF International’s explainer on what green bonds are and why they are becoming mainstream around the world.
