Blue Bonds

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    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