Earlier on this week, Seychelles launched the world’s first sovereign blue bond to fund marine projects. The bond is a financial instrument designed to support sustainable marine and fisheries projects.
Valued at US $15m over 10 years as well as guarantees from the World Bank and the Global Environment Facility, the bond will serve to support the Seychelles’ transition to sustainable fisheries. As one of the world’s biodiversity hotspots, Seychelles, which boasts an Exclusive Economic Zone of 1.4m square km, is balancing the need to both develop economically and protect its natural endowment.
Speaking at the launching of the bond, the Vice President, Vincent Meriton said that Seychelles is honored to be the first nation to pioneer such a novel financing instrument. He added that the bond is part of an initiative that combines public and private investment to mobilize resources for empowering local communities and businesses. As such, he said, the move will go a long way towards assisting Seychelles achieve a transition to sustainable fisheries.
Proceeds from the bond will be used to support the expansion of marine protected areas, improved governance of priority fisheries and the development of the Seychelles’ blue economy. Grants and loans will also be provided through the Blue Grants Fund and Blue Investment Fund. These are managed by the Seychelles’ Conservation and Climate Adaptation Trust (SeyCCAT) and the Development Bank of Seychelles.
Seychelles was assisted in developing the Blue Bond by the World Bank by reaching out to the three investors — Calvert Impact Capital, Nuveen and Prudential. The Seychelles blue bond is partially guaranteed by a US $5m security from the World Bank and further supported by a US $5m concessional loan from the Global Environment Fund. The latter will reportedly cover interest payments for the bond in part.