Question 1

What is a blue bond?

Accepted Answer

A blue bond is a debt instrument that raises capital exclusively for ocean or water-related projects that deliver measurable environmental outcomes, such as marine conservation, sustainable fisheries, coastal climate adaptation, water infrastructure, and more. Blue Bonds sit within the broader green bond framework governed by ICMA's Green Bond Principles, but carry a specific thematic focus on water and ocean systems, aligned with SDG 6 (Clean Water and Sanitation) and SDG 14 (Life Below Water).

Question 2

What are the different types of blue bonds?

Accepted Answer

Blue bonds fall into two broad types: (1) Use of Proceeds Bonds, where the issuer raises capital and commits to allocate funds exclusively to eligible ocean or water-related projects, with proceeds tracked and reported against specific activities. Blue bonds are a subcategory of green bonds within this structure, and can be issued by sovereigns, development banks, financial institutions, and corporates. (2) Sustainability-linked bonds, where rather than ringfencing funds for specific projects, the issuer commits to achieving measurable ocean or water-related performance targets (KPIs). The coupon rate is directly tied to performance; if targets are missed, the rate steps up as a financial consequence.

Question 3

How do blue bonds differ from green bonds or sustainability bonds?

Accepted Answer

All three are governed by ICMA frameworks and share the same four core components: use of proceeds, project evaluation and selection, management of proceeds, and reporting. The difference lies in scope. Green Bonds finance a broad range of environmental projects, spanning renewable energy, clean transportation, sustainable water management, biodiversity conservation, and more. Blue bonds are a focused subset of green bonds, restricted specifically to ocean and water projects — every blue bond is effectively a green bond, but not every green bond qualifies as blue. The distinction matters because blue bonds require a direct, demonstrable link to ocean or water ecosystem outcomes. Sustainability bonds are the broadest category, financing a combination of both environmental and social projects within a single instrument.

Question 4

Can a single bond carry both a blue and a green label?

Accepted Answer

Yes. Since blue is a subset of green, a bond can carry both labels. This typically happens when an issuer wants to signal a specific ocean focus to investors while remaining within the broader, more established green bond market. For example, Emirates NBD recently issued a dual-tranche bond totalling $1 billion, including both green and blue categories, where proceeds were allocated to water-related projects alongside other green activities.

Question 5

What is the Sustainable Blue Economy?

Accepted Answer

The Sustainable Blue Economy refers to economic activity that uses ocean, coastal, and water resources responsibly, in a way that protects marine and freshwater ecosystems while still supporting livelihoods and growth. It covers sectors like fisheries, aquaculture, marine transport, offshore renewable energy, coastal tourism, and water infrastructure — but only when practiced sustainably.

Question 6

What kinds of projects can blue bonds finance?

Accepted Answer

Blue bonds can finance a wide range of ocean and water-related projects across six broad sectors: (1) Sustainable water and wastewater management — water supply infrastructure, wastewater treatment, water efficiency technologies, and pollution prevention systems. (2) Ocean-friendly products, marine biotechnology and chemicals — biodegradable alternatives, plastic collection and recycling, and reduction of fertiliser and chemical runoff. (3) Transport and Shipping — cleaner shipping fuels, port upgrades, emissions reduction at sea. (4) Fisheries and aquaculture — sustainable fishing practices, MSC/ASC certified operations, bycatch reduction, and supply chain traceability. (5) Habitat restoration and protection of coastal, marine, and watershed environments — protecting and restoring mangroves, seagrasses, coral reefs, wetlands, and establishing Marine Protected Areas (MPAs). (6) Tourism and recreation — licensed, certified low-impact tourism that supports conservation in areas close to water bodies. Eligibility alone is not sufficient; blue bonds must demonstrate measurable environmental outcomes. Issuers typically reference the IFC Guidelines for Blue Finance (V2.0), the Practitioner's Guide (2023), and TNFD for impact indicators and reporting standards.

Question 7

What is explicitly excluded from blue bond financing?

Accepted Answer

Based on the UNEP FI Recommended Exclusions for Sustainable Blue Economy Financing, the following are explicitly excluded: illegal or destructive fishing (blast fishing, cyanide fishing, IUU fishing, or trading threatened species); harmful aquaculture (farms in protected areas, using banned chemicals, or farming invasive species); polluting ports and ships (exceeding IMO/MARPOL emission limits or with oil spill violations); irresponsible shipping (improper waste disposal at sea, heavy fuel oil use in Arctic waters, poor labour conditions); poorly sited offshore energy (wind farms in ecologically sensitive marine areas without proper assessment); harmful coastal tourism (developments that displace communities, destroy critical habitat, or involve destructive wildlife interactions); and unsustainable waste businesses (products designed for obsolescence, toxic materials, or operations that lack end-of-life waste plans).

Question 8

How big is the blue bond market? What is the current state of the blue bond market?

Accepted Answer

The labelled blue bond market remains a small but fast-growing segment of the broader sustainable bond market. Since the Seychelles issued the first sovereign blue bond in 2018, cumulative labelled blue bond issuance has grown to approximately $18 billion across 112 issuers as of early 2026. However, the opportunity is considerably larger than the labelled market suggests — an estimated $80 billion is already flowing into water and ocean-related sectors within the broader sustainable bond universe, without carrying a formal blue label. (Source: Environmental Finance — Sustainable Bonds Insight 2026)

Question 9

Who can issue a blue bond?

Accepted Answer

Any government, financial institution, or company that can demonstrate a credible commitment to ocean or water-related projects and meet the transparency and reporting requirements can issue a blue bond. In practice, issuers fall into three groups: Governments (national governments or subnational entities such as state and city governments); Development banks (institutions like the World Bank, ADB, and IFC that channel capital into high-impact ocean and water projects, particularly in emerging markets); and Private sector (commercial banks and corporates). For instance, Japanese shipping company Mitsui O.S.K. Lines (MOL) issued a JPY 10 billion (approx. USD 70 million) blue bond in January 2024 to fund marine environmental projects, marking the world's first blue bond in the shipping industry.

Question 10

Who invests in blue bonds?

Accepted Answer

Blue bonds attract a broad range of investors, from large institutions to impact-focused individuals: Asset managers and investment firms (executing investment decisions on behalf of asset owners, often implementing ESG mandates); High-net-worth investors (individual or family office investors, impact investors and private equity funds); Pension funds (large institutional investors that increasingly incorporate ESG criteria); Development banks (organisations like IFC and EBRD, which can function both as asset owners and as intermediaries channelling donor funds); Sovereign wealth funds (government-owned investment funds that may allocate a portion of their assets to blue bonds); Philanthropic foundations (organisations that invest in sustainable and ocean conservation initiatives); Insurance companies (major institutional investors with long-term investment horizons aligned with blue bond maturities); and Central banks (some include green and blue bonds in their foreign exchange reserves).

Question 11

What are the minimum requirements for issuing a blue bond?

Accepted Answer

For a bond to qualify as blue, the issuer must follow ocean and water-specific guidance from recognised blue finance standards, such as the Practitioner's Guide for Bonds to Finance the Sustainable Blue Economy (2023), and IFC Guidelines for Blue Finance, Version 2.0 (2025). These clarify which projects are eligible, how environmental impact should be measured and reported, and ensure alignment with core blue bond principles. It is also market practice to obtain a Second Party Opinion (SPO) from an independent reviewer to confirm the bond's framework meets blue standards. For example, you can check the SPO report for DP World's 2023 blue bond.

Question 12

Are blue bonds suitable for emerging markets?

Accepted Answer

Yes, and emerging markets are where blue bonds are most needed. Coastal and ocean-dependent economies across Asia, Latin America, and the Pacific face acute pressures on food security, livelihoods, and climate resilience, making the blue economy central to their development priorities. The market is increasingly proving this out — SABESP, the São Paulo state water utility, recently issued a record $1.35 billion blue bond, the largest in history, structured with IDB Invest to expand wastewater coverage to 2.5 million people. It is a strong signal that well-structured transactions can attract institutional capital at scale in emerging markets. That said, real barriers remain: higher borrowing costs, limited local investor bases, and weaker reporting infrastructure. Development banks such as ADB, IFC, IDB Invest, and the World Bank play a critical role here, offering technical assistance, first-loss guarantees, and anchor investment to make issuances viable.

Welcome to BBA Resources

Commonwealth Guide to Blue Bond Issuance

Commonwealth Blue Bond Readiness Programme

Frequently Asked Questions

Standards, Guides & Case Studies

Standards & Guides

Green Bond Principles

Sustainability-Linked Bond Principles

Practitioner's Guide — Bonds to Finance the Sustainable Blue Economy

IFC Guidelines for Blue Finance, Version 1.0

IFC Guidelines for Blue Finance, Version 2.0

Commonwealth Guide to Blue Bond Issuance

UNEP FI Recommended Exclusions for Financing a Sustainable Blue Economy

Practical Guidance to Issue a Blue Bond

Sustainable Blue Economy Finance Principles

Reference Guide for Sustainable Blue Economy Bonds

ADB's Ocean Finance Framework

Case Studies

Sovereign Blue Bonds

Seychelles: World's First Sovereign Blue Bond

Indonesia: First Blue Bond in the Japanese Debt Capital Market

Debt-for-Nature Conversions

Belize: Debt Conversion for Marine Conservation

Barbados: US$73 Million Sustainability-Linked Blue Bond for Ocean Conservation

Gabon: US$500 Million Debt-for-Nature Swap Supporting Ocean Conservation

Corporate Blue Bonds

Ørsted: €100 Million Blue Bond for Offshore Biodiversity and Sustainable Shipping

DP World: US$100 Million Blue Bond for Sustainable Maritime Transport

Mitsui OSK Lines: Blue Bond Framework and Sustainability Reporting

Development Finance & Blended

IDB — Banco Bolivariano Ecuador: US$50 Million Blue Bond

World Bank / Morgan Stanley: US$10 Million Sustainable Development Bond for Marine Plastic Waste

ADB Blue Bonds: Finance for Ocean-Positive Investments in Asia and the Pacific

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