Incorporating Blue Bonds as a funding alternative for a sustainable development project

Abstract

This study aims to examine Blue Bonds as a guarantee issued by the issuer (government and companies) as alternative financing. Compared to ordinary bonds that are issued only to meet the issuer's funding needs, the transaction results in Blue Bonds will be used to support marine protection, fisheries governance, waste and water pollution management, and the restoration of marine ecosystems. In this study, the author uses the method literature review sourced from journals, books, reports from related ministries, international financial institutions such as the World Bank, and news from national and international media. The results of this study indicate that by issuing Blue Bonds, the government and companies will get more funds from bond investors. Investors will receive a return in the form of a coupon (fixed interest rate) from the issuer and pay according to schedule and the initial principal investment. Not only that, the government and companies will get a good reputation among investors and actively contribute to Indonesia's maritime development.

The Blue Bond Market: A Catalyst for Ocean and Water Financing

“…Most blue bond papers only discuss single case studies, providing limited insights into the potential of blue bonds as a financing mechanism for global ocean and freshwater sustainability. Althalet et al (2021) discuss the potential and barriers of issuing blue bonds in Indonesia, while Gonzalez-Ruiz et al (2019) discuss the potential of including blue bonds in a financing structure for a wastewater treatment plant. March et al (2023) discuss blue bonds to support the sustainable blue economy in the Bahamas.…”