On 29 October 2018, the Republic of Seychelles launched the world’s first sovereign bond, an innovative financial instrument designed to support sustainable projects in the sea and fisheries sector.
The bond, which raised US $ 15 million from international investors, demonstrates the potential of countries to tap capital markets to finance the sustainable use of marine resources. The World Bank helped develop the blue bond and join the three investors: Calvert Impact Capital, Nuveen and Prudential.
We are honored to be the first country to be the first to launch such an innovative financing instrument. The Blue Bond, part of an initiative combining public and private investment to mobilize resources to empower communities and local businesses, will greatly assist Seychelles in transitioning to sustainable fisheries and protecting our oceans while sustainably developing our blue economy, “said Vincent Meriton, Vice President of the Republic of Seychelles, at the” Our Ocean “conference in Bali.
The money raised will go towards supporting the expansion of marine protected areas, improving the governance of priority fisheries and developing the blue economy of Seychelles. Guarantees and loans will be provided through the Blue Grants Fund and the Blue Investment Fund, managed respectively by the SeyCCAT (Conservation and Adaptation Fund) and the Seychelles Development Bank (DBS).
“The World Bank is pleased to participate in the launch of this blue sovereign bond and believes that it can serve as a model for other small island developing States and coastal countries. This is a powerful sign that investors are increasingly interested in supporting sustainable management. and the development of our oceans for generations to come, “said Laura Tuck, vice president of sustainable development at the World Bank.
Seychelles is an archipelago country made up of 115 islands of granite and coral. Its area is 455 km2, spread over an exclusive economic zone of about 1.4 million km2. As one of the hotspots of biodiversity in the world, Seychelles reconciles the need to develop their economy and protect their natural heritage.
After tourism, the fishing sector is the most important sector of the country, contributing significantly to the annual GDP and employing 17% of the population. Fishery products account for about 95% of the total value of national exports;
The Seychelles Blue Bond is an important step in our long-standing support for ocean conservation. The Global Environment Facility (GEF) is proud to invest in developing national blue economies that protect the rich marine ecosystem while supporting economic growth, improved livelihoods and job creation “, said Naoko. Ishii, CEO and President of the Global Environment Facility (GEF).
The Seychelles blue bond is partially secured by a USD 5 million World Bank (IBRD) guarantee and supported by a USD 5 million concessional loan from the GEF that will partially cover the bond’s interest payments. The proceeds of this bond will also contribute to the World Bank’s fisheries governance and shared growth program for the South West Indian Ocean, which helps countries in the region to sustainably manage their fisheries and increase economic benefits. of their fishing sectors.
A World Bank team of experts from the Treasury, Legal, Environment and Finance groups worked with investors, structured the blue bond and helped the Government set up a platform for channel its products. The business case for a sovereign blue bond was initially made with the support provided to Seychelles by Prince of Wales Prince of Wales SAR Sustainability Unit. Standard Chartered acted as an investment agent for the bond and Latham & Watkins LLP advised the World Bank as an external advisor. Clifford Chance LLP acted as a transaction advisor.
