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MANILA, Philippines, September 13, 2021 (ENS) – To finance ocean protection projects in Asia and the Pacific, the Asian Development Bank issued its first double-tranche blue bonds denominated in Australian and New Zealand dollars.
The financing gap to support healthy oceans is widening every year and the scale of the problem requires moving from small transactions to transformative market agreements, according to the AfDB. “Innovative financial products like blue bonds diversify and broaden the investor base, thereby increasing the amount of capital that can be invested in healthy oceans.”
The A $ 208 million (approximately US $ 151 million) 15-year issue was bought by life insurance company Dai-chi and organized by Citigroup Global Markets Limited.
The 10-year NZ $ 217 million (approx. $ 151 million) issue was purchased by Meiji Yasuda Life Insurance Company and arranged by Crédit Agricole CIB. The bonds were issued under the AfDB’s broader green and blue bond framework.
“Having our first 15-year Australian dollar blue and 10-year New Zealand dollar bonds as part of the AfDB’s green and blue bond framework is another important milestone for sustainable ocean finance. The content reflects the needs and our long-term support to the sector, â€said Ingrid van Wees, AfDB Vice President of Finance and Risk Management.
“With our framework, we are setting a new standard for blue financing in the marketplace that can be replicated,†said van Wees.
Bonds are part of AfDB Action Plan for Healthy Oceans and Sustainable Blue Economies launched in 2019, which aims to catalyze sustainable investments in Asia and the Pacific by committing to invest and provide technical assistance of at least US $ 5 billion by 2024.
“The Action Plan for Healthy Oceans and Sustainable Blue Economies is an essential element of the AfDB’s strategy to expand the support needed by its developing member countries to invest in healthy oceans, ensure the achievement of the SDG 14 and contribute to the security and prosperity of the region, â€said Bambang Susantono, AfDB Vice President for Knowledge Management and Sustainable Development.
Sustainable Development Goal (SDG) 14 deals with “life underwater†and is one of the 17 SDGs established by the United Nations in 2015.
An example of an eligible project that can be funded by the bond is the Greater Malé Waste-to-Energy project in the Maldives, which will stem the flow of plastics and other waste to the ocean and reduce gas emissions. Greenhouse effect.
Another is the Anhui Huangshan Xin’an River Ecological Protection and Green Development Project in China, which will reduce diffuse pollution of the marine environment from “source to sea” by supporting green agriculture and controlling the use of pesticides and fertilizers.
The AfDB’s blue bonds are replicable, scalable and aim to develop the ocean economy in Asia and the Pacific. The proceeds will finance projects that improve the health of the oceans through ecosystem restoration, natural resource management, sustainable fisheries and aquaculture, coastal pollution reduction, circular economy, marine renewable energies and green ports and shipping.
At the same time, these investments aim to support sustainable economic growth and jobs for the future.
The blue bond market first appeared in 2018 with World Bank support, when Seychelles issued a $ 15 million blue bond.
As one of the world’s important biodiversity centers, Seychelles, an archipelago of 115 islands in the Indian Ocean off East Africa, needed to balance economic development with environmental protection. The proceeds of the bond have been used to support the expansion of marine protected areas, improve governance of priority fisheries and develop the Seychelles ocean economy.
“The bond, which has raised $ 15 million from international investors, demonstrates the potential of countries to tap capital markets to finance the sustainable use of marine resources,” according to the World Bank.
In January 2019, the Nordic Investment Bank followed suit by issuing a SEK 2 billion blue bond. To draw attention to the pollution by plastic waste in the oceans, the World Bank launched in April 2019 a blue bond which raised 10,000,000 USD.
The fourth blue bond issue was carried out by the Bank of China in November 2020. The dual currency bond raised the equivalent of $ 942 million for ocean protection. It was the private sector’s first blue bond, the first from a commercial bank and the first in Asia.
Now, AfDB’s Extended Green and Blue Bond Framework has received a second part review from CICERO Shades of Green Green Bond Investment Frameworks Assessor https://cicero.green/ to provide investors with the assurance that AfDB bonds actually mitigate the climate. changing and protecting the health of the oceans. In 2021, the CICERO Shades of Green valuation methodology served as the basis to become an approved valuator for Nasdaq green stock designations and served as the basis for the first green IPO launched on Euronext.
Developing member countries can take the AfDB’s approach and issue sovereign blue bonds to fund ocean health projects that will both protect vital ocean resources and provide much needed economic boost.
The selected image: Flocks of terns fly over an uninhabited island in the Maldives archipelago on July 7, 2016 (Photo by cattan2011)
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