Seychelles issues the world’s first ‘Blue Bond’

Seychelles’ beautiful islands are threatened by climate change and industrial fishing. [Shutterstock]

For the first time, a state – Seychelles – has issued a ‘Blue Bond’, which will finance the protection of marine ecosystems and the development of sustainable fishing. EURACTIV France’s media partner, the Journal de l’environnement reports.

As part of a project lanced by the World Bank in late August, Seychelles’ $15 million bond will finance the protection of marine ecosystems and the development of sustainable fishing.

Announced as part of Our Ocean Conference in Bali, the $15 million (€13.3 million)  will come from three American investors, Clavert Impact Capital, Nuveen and Prudential, and will be used to finance “the expansion of marine protected areas, improved governance of priority fisheries and the development of Seychelles’ blue economy,” stated a press release by the World Bank.

Guarantee bond

The archipelago of Seychelles brings together 115 granite and coral islands over an area of 455 square kilometres. The state is particularly dependant on fishing, which is the country’s second largest economic sector after tourism and employs 17% of the population. Fish products constitute 95% of the total value of domestic exports.

The blue bonds, which mature in 10 years, benefit from a $5 million (€4.4 million) guarantee from the World Bank and a $5 million (€4.4 milllion) concessional loan from the Global Environment Facility (GEF) which will partially cover interest payments for the bond.

“Climate change has created both challenges and possibilities for investors. Its attractive relative valuation and the technical and financial support of the World Bank make the first blue bond a significant opportunity for our clients,” said Stephen Liberatore, manager of Nuveen’s ESG fixed income strategies, including the TIAA-CREF Social Choice Bond Fund.

This bond completes the framework agreed with the NGO The Nature Conservancy, which raised funds to purchase part of Seychelles’ debt in exchange for commitments to preserve marine areas. Moreover, the archipelago has been targeted by the World Bank’s SWIOFish 3 project, which supports sustainable fishing.

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