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Accelerating Blue Bonds Issuances in Latin America and the Caribbean
Published: June 2021
Editor/s: IDB Invest | UN Global Compact
Author/s: Maria Alejandra Blanco-Iturbe; Malini Samtani; Carole Sanz-Paris (IDB Invest).
Erik Giercksky; Howard Li, Manager; Suzanne Johnson; Mary Kate Currey (UN Global Compact).

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Blue bonds are emerging as a new asset class that helps to solve water-related challenges, create sustainable ocean business opportunities, and signal responsible ocean stewardship.

IDB Invest has partnered with the UN Global Compact to understand blue market opportunities in Latin America and the Caribbean (LAC). The following are the five key conclusions of the document presented:

1.Blue Bonds fund commitments towards oceans, water related initiatives and sustainability.
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. Until there is a widely accepted set of blue bond principles, issuers are encouraged to use ICMA’s social and green bond principles, adapted to a blue use of proceeds. Moreover, the UN Global Compact Sustainable Ocean Principles can serve as a guide for responsible business practices.

2. The blue economy can create a triple win for people, nature and economic development
Maintaining a healthy and productive ocean is a critical precondition for the achievement of all 17 SDGs.
By expanding eligibility criteria and frameworks, blue bonds can fund more business opportunities that positively impact the ocean and water-related projects, and support sustainable development.

3. Blue Bonds are not just for fisheries and shipping companies
Blue use of proceeds can be allocated to sustainability projects that are directly operating in or by the ocean, seas and freshwater such as ports, shipping, infrastructure, tourism, fisheries, aquaculture, offshore renewable energy.
Projects within the blue economy can reduce negative impacts (e.g., poor waste management) as well as accelerate a positive contribution (e.g., sustainable fisheries), with numerous sectors having a role to play, with a particular focus on women, small producers, minority groups, and migrants into these projects.

4. There are great opportunities in Latin America and the Caribbean for a thriving blue economy
LAC has a coastline that extends over 70,000 kms. With 25% of Latin America’s population and 100% of the Caribbean’s population living on the coast, the blue economy is essential for sustainable business in LAC.

5. Blue bonds are where green bonds were ten years ago
Development finance institutions were important in building credibility around the green bond concept. IDB Invest is now committed to developing the blue bonds market in the same way, and can support companies interested in issuing in blue bonds while attracting institutional investors.