Seychelles Blue Bond

The Seychelles blue bond was the first sovereign bond issued specifically to finance marine conservation and sustainable development.[1] It was issued by the government of Seychelles on 29 October 2018, and raised US$15 million. The proceeds from the bond were used to support the expansion of marine protected areas, the improving fisheries management, promotion of sustainable tourism and the development of climate-resilient coastal communities[2]

Background

The Seychelles is a small island country in the Indian Ocean. It is a popular tourist destination with an economy that is heavily dependent on the ocean. In Seychelles, the fisheries sector employs 17% of the population and contributes 20% to GDP[3]

The Seychelles is also vulnerable to climate change as rising sea levels and ocean acidification continues to threaten costal communities and marine ecosystems.[4]

Bond

The Seychelles blue bond is a 10-year bond with a coupon of 6.5%.[5] It was issued through a private placement to three impact investors: Calvert Impact Capital, Nuveen and Prudential.[6]

The bond was initiated with a US$5million guarantee from the World Bank. In addition, the World Bank provided a US$5million concessional loan to help cover the interest payments on the bond[2]

Proceeds

The proceeds from the bond were used to support a number of projects including

  1. The expansion of marine protected areas through a committed effort by the government of Seychelles to increase the protected Exclusive economic zone to 30% by 2020.[7]
  2. The improvement of fisheries management by funding the development of new fisheries management tools[8]
  3. The development of new infrastructure to improve climate-resilience and the implementation of climate adaptation measures.

Impact

The Seychelles Blue Bond was a success and has inspired the issuance of other blue bonds by countries such as Belize,[9] Palau[10] and Tonga.

References

  1. ^ March, Antaya; Failler, Pierre; Bennett, Michael (2023). "Challenges when designing blue bond financing for Small Island Developing States". ICES Journal of Marine Science. doi:10.1093/icesjms/fsac238.
  2. ^ a b "Seychelles launches World's First Sovereign Blue Bond". World Bank. Retrieved 15 June 2023.
  3. ^ "Seychelles embraces transparency in fisheries, but gaps in data and action remain". Mongabay Environmental News. 11 February 2022. Retrieved 15 June 2023.
  4. ^ ByWebmaster. "Building Capacity for Ocean Acidification Monitoring – Blue Economy Research Institute". Retrieved 15 June 2023.
  5. ^ "Seychelles' Sovereign Blue Bond | Green Finance Platform". www.greenfinanceplatform.org. Retrieved 15 June 2023.
  6. ^ "Seychelles Blue Bonds". Blended Finance Taskforce. 21 November 2020. Retrieved 15 June 2023.
  7. ^ "Seychelles designate one third of its EEZ as Marine Protected Areas". Ministry of Agriculture, Climate Change and Environment. Retrieved 15 June 2023.
  8. ^ "FAO.org". fao.org. Retrieved 15 June 2023.
  9. ^ Hale, Kori. "Africa's Seychelles Blue Bond Economy Inspires Belize". Forbes. Retrieved 15 June 2023.
  10. ^ "Exploring Blue Bonds potential to support the Ocean Economy | United Nations Development Programme". UNDP. Retrieved 15 June 2023.

Further reading

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