Investing in the New Blue Economy: The Changing Role of International Development Organizations in Catalyzing Private Sector Investment in Support of Regional Strategic Action Programmes for the Sustainable Development of Coasts and Oceans
Over the last 20 years, governments sharing common coastal and ocean ecosystems have developed and agreed on concrete regional action programs to stop and, in some cases, reverse a trend of deteriorating coastal and ocean resources. Implementation of these action programs requires significant investments by the public and private sectors alike, with the potential for substantial economic growth and enhanced social well-being. For this to happen, new institutional arrangements, technologies, and financial vehicles and asset classes are needed to mainstream innovative “blue economy” projects that have the potential to transition economies and communities to more sustainable development paths.
This paper proposes one such set of transformative approaches for private and public investments in the blue economy and the role of the international development community in catalyzing this transformation. It proposes using the government approved regional action programs as guides to investment, as strategic frameworks to prioritize action, and as tools to reduce private sector investment risks.
Establishing regional pre-investment facilities supported by the international development and donor community could serve as a new institutional arrangement to help cultivate pipelines of sustainable and bankable projects for financing by specialized blue economy commercial funds. To finance these pre-investment facilities, success fees can be agreed upon by all stakeholders and leveraged on closed investment deals supported by the specialized blue economy commercial funds or by an ecosystem of emerging sustainable investment funds. These success fees can assist the pre-investment facilities in becoming donor independent over time.
This paper examines the development of such a pre-investment facility to cultivate an ecosystem of sustainable blue economy investment projects for the Seas of East Asia and presents the lessons for development organizations, local and national governments, and investors from pilot investment cases in four ocean-related sectors: sustainable seafood, marine protected areas and sustainable tourism, wastewater management, and plastic pollution.
Whisnant, Ryan and Vandeweerd, Veerle
"Investing in the New Blue Economy: The Changing Role of International Development Organizations in Catalyzing Private Sector Investment in Support of Regional Strategic Action Programmes for the Sustainable Development of Coasts and Oceans,"
Journal of Ocean and Coastal Economics:
1, Article 8.
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