Blue Bonds

In News

• Recently, markets regulator Securities and Exchange Board of India (SEBI) has proposed the concept of blue bonds as a mode of sustainable finance.

About

• Such securities can be utilised for various blue economy-related activities, including oceanic resource mining and sustainable fishing. 
• SEBI has suggested strengthening the framework for green bonds by amplifying the definition of green debt securities and enhancing disclosures.
• At present, the blue economy comprises 4.1 percent of India’s economy.
• Indian companies raised nearly USD 7 billion through ESG (Environmental, Social and Governance) and Green bonds in 2021 compared to USD 1.4 billion in 2020 and USD 4 billion in 2019.

About Blue bonds

• Blue bonds are pioneering financial instruments that are designed to support sustainable marine and fisheries projects. 
• They are a subset of the green bonds. 
• The World Bank defines blue bonds “as a debt instrument issued by governments, development banks or others to raise capital from impact investors to finance marine and ocean-based projects that have positive environmental, economic and climate benefits.”
• In 2018, the Republic of Seychelles launched the world’s first sovereign blue bond.

Image Courtesy: idbinvest.org

Significance

• India has tremendous scope for deployment of blue bonds in various aspects of the blue economy.
• India has a 7,500 kilometer-long coastline and 14,500 kilometers of navigable inland waterways, and the development of the blue economy can serve as a growth catalyst.

Source: ET