Remarks by Roberta Casali, ADB Vice-President for Finance and Risk Management, at the “Financing the Blue Economy in Asia and the Pacific” seminar, a side session during the UN Ocean Conference, 29 June 2022
Your Excellencies, distinguished guests, esteemed partners and friends. On behalf of the Asian Development Bank, it is my great pleasure to welcome you to our side event Financing the Blue Economy in Asia and the Pacific.
A healthy ocean is critical to both climate action and global biodiversity, and consequently underpins our region’s prosperity. But its ecosystem services have for too long been seriously undervalued. For example, it is not widely known that coastal ecosystems found in our region function as an important carbon sink. They can hold up to four times more carbon dioxide than tropical rainforests. They also help protect us from the adverse impacts of increasingly frequent storms and floods. And of course in terms of biodiversity, the Coral Triangle does not have equals on Earth.
In contrast, ocean health is feeling the detrimental consequences of decades of unabated unsustainable practices at sea and on land, like overfishing, mining, pollution, waste dumping, human-induced climate change. Even before COVID-19, progress toward SDG 14 was already off track in Asia and the Pacific Region. As a result of the pandemic, the situation got worse.
We urgently need to scale up investments in the sustainable blue economy, stop harmful practices, and give more value to the power of partnerships for ocean health. This is why in 2019 ADB launched the Healthy Ocean Action Plan with a commitment to catalyze $5 billion in financing and technical assistance by 2024.
Multilateral Development Banks straddle the global financial markets and the development community. Furthermore, they have the convening power to link governments with market participants. We all together have a critical opportunity and responsibility to advocate, enable, catalyze, and facilitate finance for the blue economy.
Following, I will elaborate on ADB’s actions to:
- Firstly, building market infrastructure and enabling environments; and
- Secondly, developing platforms to mobilize finance.
Building market infrastructure and enabling environments
A strategic approach for a country to build necessary market infrastructure and an enabling environment to successfully unlock finance requires several essential elements:
- First, the development of a Blue Economy Roadmap—I am delighted that the honourable Josephat Rizal Primana, Indonesia’s Deputy Minister for Maritime and Natural Resources is with us today to share Indonesia’s experiences in formulating its Roadmap.
- Second, clear financing frameworks for ocean-related investments and capacity development of investors and financiers alike — to bridge the gap, ADB published an Ocean Finance Framework that defines standards and metrics for ocean investments. This informs all investments in ADB and it is easily replicable.
- A third critical element is to build a robust pipeline. Since ocean health-related development problems require integrated, multi-sectoral solutions, building such a strong pipeline requires governance arrangements that cut through sectoral and/or institutional silos. The Indonesian Co-ordinating Ministry of Maritime Affairs is a good example of taking this approach.
- A final element I’d like to highlight are blue bonds, innovative debt instruments that raise funding at scale for investments in the sustainable blue economy.
Together with its partners, ICMA, UN Global Compact, UNEP Finance Initiative, and International Finance Corporation (IFC), ADB has been working to develop the Global Guidance for Blue Bonds. The Guidance will provide clear criteria, practices and examples for blue bond lending and issuances. I am proud that we launched the draft for consultation yesterday at the Sustainable Blue Economy Investment Forum in Cascais.
ADB also recently launched a Blue Bond Incubator to support de-risking of sovereign and private sector blue bond issuances in developing Asia.
I am delighted to share that ADB is working with the Fiji Ministry of Economy to issue its first blue bond. We will hear more about that from His Excellency, Ambassador Satyendra Prasad.
Platform to mobilize finance
With this, I come to my next point: ADB’s new Platforms to mobilize blue finance.
ADB has established the Blue SEA Finance Hub, based in the ADB Resident Mission in Jakarta, Indonesia, to serve as an institutional base for accelerating blue economy investments across the Southeast Asia region.
The hub is expected to catalyze a large flow of capital from both public and private sources, including a vast range of financing instruments ranging from micro and gender-lens financing to public-private partnerships, debt and equity instruments and insurance products.
Ensuring that small and medium enterprises (SMEs) – that represent 70% of employment in developing countries – are prioritized, ADB has also developed the Blue Impact Ocean Financing Facility, a digital blended finance platform. This platform provides SMEs with replicable investment opportunities and facilitates scaling up bankable projects in, for example, seaweed farming, seafood processing, and blockchain technology for the seaweed industry.
Since cross-sectoral solutions are vital, ADB is pleased to have formed a new partnership and recently joined the Ocean Risk and Resilience Action Alliance (ORRAA), a multi-sector collaboration between governments, financial institutions, the insurance industry and environmental organizations on the development of innovative products that both address ocean risk and build resilience.
In closing, I’d like to express warmest thanks to our developing member countries and all other relevant partners who have supported and proactively collaborated with ADB to generate nature-positive investments across Asia and the Pacific.
And thank you all for participating in this UN Ocean Conference side event. I am convinced that you, too, will join us in transforming the blue economy, not just for one region, but for the sake of everyone’s future well-being and prosperity.