First blue bond issue raises $302 million for ADB
MANILA, Philippines — Manila-based Asian Development Bank (ADB) has raised $302 million from its first ever dual tranche blue bond issuance, the proceeds of which will be allocated for sustainable ocean financing.
ADB’s first ever dual-tranche blue bonds are denominated in Australian and New Zealand dollars and will finance ocean-related projects in Asia and the Pacific.
The A$208 million ($151 million) 15-year bond issue was purchased by Tokyo-based The Dai-ichi Life Insurance Co. Ltd. and arranged by Citigroup Global Markets Ltd.
On the other hand, the NZ$217 million ($151 million) 10-year bond issue was purchased by Meiji Yasuda Life Insurance Co., one of Japan’s oldest and largest insurers. It was arranged by Credit Agricole CIB.
Both bonds were issued under ADB’s expanded Green and Blue Bond Framework meant for sustainable ocean financing.
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- Pacific by committing to invest and provide technical assistance of at least $5 billion by 2024.
ADB vice president for Knowledge Management and Sustainable Development Bambang Susantono said this is a vital part of ADB’s strategy to expand the necessary support for developing member countries to invest in healthy oceans and contribute to the security and prosperity of the region.
It will also contribute to the achievement of Sustainable Development Goal 14 for the conservation and sustainable use of the oceans, seas and marine resources.ADB argued that the funding gap to support healthy oceans is getting wider 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 said.-Proceeds of the blue bonds 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.
The investments will also support sustainable economic growth and jobs for the future.
Developing member countries 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.