Following the Federal Government of Nigeria’s inauguration of Committee on Blue Economy on Monday January 16, 2022, Financial Analysts are weighing the potentials in blue bonds as an emerging innovative financing instrument to mobilize capital to solve social and environmental challenges, create sustainable ocean and water-related business opportunities, and signal responsible ocean stewardship in line with the Sustainable Development Goals (SDGs) and the Paris Agreement.
Speaking at the inauguration in Abuja, Vice President Yemi Osinbajo said “Blue Economy offers a whole new vista of opportunity for economic activity, especially in areas close to oceans, rivers and coasts; but more importantly, perhaps the entire country, because practically everywhere has some body of water that can be exploited.”
The Committee, headed by the Vice President, is charged with providing an assessment of the current realities and looking at recommendations to accelerate the Blue Bonds Market.
WHY BLUE BONDS?
- When a company issues a Blue Bond, it specifically commits to investing the proceeds on business solutions for oceanic health, freshwater and/or to improve access to water and sanitation.
- Maintaining a healthy and productive ocean is a critical precondition to mitigate the effect of climate change.
- Expanding the sustainable ocean economy will also provide food for a growing population and foster low-carbon transport. In addition, it offers the potential to provide almost unlimited renewable energy.
- Blue Bonds are not just for fisheries and shipping companies. Their use of proceeds can be allocated to sustainability projects that are directly operating in or by the ocean, seas and freshwater such as manufacturing, consumer-packaged goods designed for waste reduction and sustainable textiles.
- IDB Invest is now committed to developing the Blue Bonds market and can support companies interested in issuing blue bonds to attract institutional investors.
OPPORTUNITIES FOR ISSUANCE
- Energy: Offshore renewable energy
- Transport: Decarbonizing shipping, ports.
- Agribusiness: End waste entering the ocean.
- Social Infrastructure: Sustainable seafood.
- Aquaculture: Sustainable Seafood.
- Manufacturing: End waste entering the ocean.
- Telecommunications, Media and Technology: Mapping the ocean, and Ocean data.
- Tourism: Ending waste entering the ocean, and Sustainable seafood.
- Banks and Financial Intermediaries: Financing will be a key enabler to accelerate ocean-based solutions