The Asian Development Bank (ADB) on September 10 issued its first-ever dual-currency, dual-tranche blue bonds denominated in Australian and New Zealand dollars that will finance ocean-related projects in Asia and the Pacific.

The A$208 million (US$151 million) 15-year issue was purchased by Dai-chi Life Insurance Company and arranged by Citi. The NZ$217 million (US$151 million) 10-year issue was bought by Meiji Yasuda Life Insurance Company and arranged by Crédit Agricole CIB. The bonds were issued under ADB’s expanded green and blue bond framework.

ADB vice-president for finance and risk management Ingrid van Wees says the blue bonds represent a new milestone for sustainable ocean finance. “The tenors reflect the needs and our long-term support for the sector,” she adds. “With our framework, we set a new standard for blue financing in the market that can be replicated.”

The bonds are part of ADB’s Action Plan for Healthy Oceans and Sustainable Blue Economies launched in 2019, which aims to catalyze sustainable investments in Asia and the Pacific by committing to invest and provide technical assistance of at least US$5 billion by 2024.

“The Action Plan for Healthy Oceans and Sustainable Blue Economies is a vital part of ADB’s strategy to expand the necessary support for its developing member countries (DMCs) to invest in healthy oceans, ensure the achievement of Sustainable Development Goal (SDG) 14, and contribute to the security and prosperity of the region,” says ADB vice-president for knowledge management and sustainable development Bambang Susantono. SDG 14 addresses “life below water” and is one of the 17 SDGs established by the United Nations in 2015.

The funding gap to support healthy oceans is getting wider every year and the scale of the problem requires a leap from small transactions to transformative market deals. Innovative financial products like blue bonds diversify and expand the investor base, thereby increasing the amount of capital that can be invested in ocean health.

ADB’s expanded green and blue bond framework has received a second-party opinion from the leading evaluator of green bond investment frameworks Cicero Shades of Green. This provides investors with confidence that ADB bonds are mitigating climate change and protecting ocean health.

An example of an eligible project that may be financed by the bond is the Greater Malé waste-to-energy project in Maldives, which will stem the flow of plastics and other wastes to the ocean and reduce greenhouse gas emissions. Another is the Anhui Huangshan Xin’an river ecological protection and green development project in China, which will reduce non-point source pollution to the marine environment from “source-to-sea” by supporting green farming and controlling pesticide and fertilizer use.

ADB’s blue bonds are replicable, scalable and aim to grow the ocean economy across Asia and the Pacific. The proceeds will finance projects that enhance ocean health through ecosystem restoration, natural resources management, sustainable fisheries and aquaculture, reduction of coastal pollution, circular economy, marine renewable energy, and green ports and shipping. At the same time, these investments will support sustainable economic growth and jobs for the future.

DMCs can adopt ADB’s approach and issue sovereign blue bonds to finance important ocean health projects that will both protect vital ocean resources and provide a much-needed economic boost.