Launch of Fiji’s first-ever Sovereign Blue Bond
November 2, 2023
Suva, Fiji - Known for its beautiful marine habitats and abundant ocean life, Fiji, like many Small Island Developing States (SIDS) is confronted with the combined problem of climate change and the sustainable management of its maritime resources.
That’s why the Government of Fiji, with support from the United Kingdom’s Blue Planet Fund and the United Nations Development Programme (UNDP) Pacific Office, has announced the issuance of Fiji's historic first-ever Blue Bond, referred to as the Fiji Sovereign Blue Bond (FSBB). UNDP has collaborated with the United Kingdom’s Blue Planet Fund to provide technical support and financial expertise to Fiji in the planning and implementation of this Blue Bond issuance.
The FSBB issuance seeks to raise private sector funds for transformative ocean activities, while also supporting conservation and protection of Fiji's important marine environment. This innovative financial instrument is a significant step forward in Fiji's commitment to long-term ocean management, economic resilience, and the enhancement of private sector participation in sustainable development. It represents an historic move toward a sustainable and resilient future for Fiji and demonstrates a pathway for other SIDS to achieve their own sustainable marine and economic ambitions.
The FSBB has been placed on the capital market for potential investors from 2nd - 7th November 2023 and will be issued to successful bidders from 8th & 9th November, with thanks to support from the Reserve Bank of Fiji. The Government is inviting tenders for the issuance of three and 15-year Fiji Sovereign Blue Bonds, with the three-year coupon rate fixed at 1 percent per annum, and 4.2 percent over 15 years with a FJD20 million ceiling established.
The FSBB will raise private capital to support Fiji's efforts to unlock the economic potential of its blue economy through sustainable use of its vast ocean resources. The Blue Bond has four priority areas focusing on:
- Using nature-based solutions for coastal protection for low-lying vulnerable coastal communities.
- Scaling up of Fiji’s aquaculture sector by focusing on advanced hatchery programs for high value species such as sea-cucumber, seaweed, grouper and shrimps to not only supplement imports but encourage community grow-outs to support livelihood development of rural communities.
- Developing sustainable towns and cities using integrated planning solutions. with a focus on advancing Fiji’s Blue Town ambitions.
- Enhancing solid waste management by enhancing the capacity of Fiji’s only sanitary landfill and boosting the capabilities of wastewater treatment for the Water Authority of Fiji.
The partnership between the Government of Fiji, the Government of the United Kingdom and the UNDP in support of the FSBB demonstrates the multi-partner commitment to furthering sustainable development and strengthening resilience in vulnerable regions. It also demonstrates the ability of development finance to unlock and leverage larger private finance for sustainable development in SIDS.
Deputy Prime Minister and Minister for Finance, Strategic Planning, National Development and Statistics, Hon. Biman Prasad said, “Recognising the need to bridge the dichotomy between economic development and sustainable use of our ocean space, the Government of Fiji has been working with the United Nations Development Programme over the past 18 months to structure Fiji’s first ever Sovereign Blue Bond with generous support from the UK Government’s Blue Planet Fund.
“The issuance of a blue bond will allow Government to implement its climate and environment conservation work without compromising its existing socio-economic commitments. It will help tap into the large domestic liquidity and divert private capital towards projects that would have otherwise never received funding from the private sector.
“It will help set the foundations for the growth of new and emerging sectors such as aquaculture, marine engineering, waste management using public private partnerships and establishment of community-led coastal business in marine protected areas.”
British High Commissioner to Fiji, His Excellency Dr. Brian Jones said, “Fiji is well known worldwide for its position and its leadership in marine conservation and the blue bond is a testament to our joint commitment to safeguarding our vital oceans. Supporting the blue bond, we think it’s a global responsibility, a global effort to combat climate change and to protect our vital marine diversity.
“It is also about showing people the way through increased education and awareness about the critical importance of our ocean, and making sure that the next generation understand that this is not all about words but through finance, through innovation and through global support, we can make a physical difference.”
UNDP Resident Representative Munkhtuya Altangerel said, “It is an honour to collaborate with the Governments of Fiji and the United Kingdom in this remarkable endeavour to address the triple planetary crisis of climate change, pollution, and biodiversity loss, using innovative country-led financing solutions.
Fiji’s vision to venture into new and innovative sources of climate finance sets a precedent for developing countries to take a leading role in unlocking finance for development beyond rudimentary mechanisms of national budget allocations. Thematic bonds can play a significant role in addressing current financing gaps, especially in developing countries, ensuring that proceeds contribute to long-lasting, sustainable development impact.”
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