To expand its marine protected areas and boost its fisheries sector, Seychelles has raised $15 million with the world’s first blue bond, which was raised from investors to finance ocean-based projects. The country’s economy is dependent on the ocean and on fisheries for food, nutrition, livelihoods and tourism.
The World Bank, which supported the issuance and offered a partial guarantee for the 10-year bond, noted that the Standard Chartered bank was used as a placement agent to sell the bond directly to three social impact investors based in the United States- Calvert Impact Capital, Nuveen, and Prudential.
According to the World Bank, “the general population will benefit from a healthier marine environment and increased food security”.
In February 2018, details were released highlighting the the first 210,000 square kilometre (81,000 square miles) area to be conserved. Activities such as fishing, oil exploration and large scale developments were limited in the most fragile spots of the area.
Seychelles, with a population fewer than a 100,000 people mainly relies on tourism and fishing for revenue. However in recent years, oil and gas companies have been exploring its turquoise waters, home to dugongs, turtles and tuna. The country defaulted on its debt in 2008 but survived with assistance from the International Monetary Fund.
The government of the archipelago, which is rich in underwater reefs and postcard-perfect beaches, have since been searching for ways to preserve their environment without endangering financial stability.
The country reached an agreement with United States-based conservation group The Nature Conservancy in February 2018, to buy up nearly $22 million of Seychelles’ outstanding $406 million sovereign debt. This was offered on the condition that Seychelles ensures a third of its marine area is protected.