While COP25 negotiators largely failed to account for civil society’s demands—and to represent all stakeholder interests at the international level—the reverse is occurring in the Seychelles, where people are no longer missing from the establishment of Marine Protected Areas (MPAs). A space-based management tool used to restrict activities, such as fishing, within a designated area, MPAs make a positive impact on ocean health, increasing resiliency to human and climate change impacts. A number of scientific factors are used to select appropriate locations and restrictions, yet the issue of livelihoods is often an afterthought to implementation. Therefore, while MPAs often improve the health of the ocean, these area based management tools may not improve the lives of those depending on the ocean as a source of income. The Seychelles has a plan to change that and is using innovative blue bonds to ensure a win-win for both ocean health and ocean livelihoods.
Blue Bonds are an innovative financing tool used to support “ocean friendly” projects. Blue Bonds present an opportunity to island and coastal nations to reinvest marine resources by refinancing their national debt.
Seychelles: First Sovereign Blue Bond
The Seychelles comprises 115 islands off the East Coast of Africa in the Indian Ocean. The nation has a population of 95,000 people and is a Small Island Developing Sate (SIDS). Like other Small Island Developing States (SIDS) fish contribute to tradition and heritage, forming a common cultural heritage within the Seychelles. Fish is critical to the Seychelles diet, with 57kg as the average consumption per person annually. This is among the world’s highest.
The top sectors in Seychelles include tourism and fisheries. The fisheries sector employs 17% of the population and fish make up 96% of the total value of domestic exports. This includes a prosperous tuna industry, which comprises a significant portion of the Seychelles’ GDP. Unfortunately, fish stocks have declined by 60% in the last thirty years, which has resulted in a massive loss of income for fishers.
The Seychelles is a leader in the blue financing industry, upholding the Sustainable Blue Economy Financing Principles . In 2018, the Seychelles launched the first sovereign blue bond to support sustainable fisheries within their EEZ. The Seychelles’ Blue Finance objective is that it “will be a vehicle for promoting and finance[ing] sustainable fisheries, ocean protection, and the Blue economy.” The Blue Finance mission is to “finance fisheries related projects and business that are committed to transform the Seychelles fisheries sector to a sustainable basis”. The Blue Finance vision is for the “ocean to be teeming with life, and fisheries safeguarded for this and future generations.”
As part of a debt swap agreement, the Seychelles must protect 30% of their Exclusive Economic Zone (EEZ) through an system of MPA. The Seychelles recognized that the entirety of their EEZ must be understood in order to effectively protect 30% of it. Therefore, the nation commenced Marine Spatial Planning (MSP) for their entire ocean territory.
The Seychelles Conservation and Climate Adaptation Trust (SeyCCAT) is an independent, nationally based, public-private trust, which manages the blue financing funds. With an experienced small island negotiator and Seychellois woman at the helm as CEO, SeyCCAT is already seeing great progress in the blue bond program through the inclusion of the Seychellois people and the protection of the marine environment.
One of the first projects that SeyCCAT took on was translating blue bond applications to Creole, which is the native language in the nation. This opened doors to the Seychellois people by sending a message that the Trust is for everyone to use.
The funds, amounting to $15 million USD, are used partially for financing a Blue Grants Fund ($3 million) and a Blue Investment Fund ($12 million). These proceeds are used to finance ocean related activities that contribute to the transition of sustainable fisheries. SeyCCAT administers the grants from the Blue Grants Fund and the Development Bank of Seychelles (DBS) will administer loans from the Blue Investment Fund.
The Seychelles blue bonds support new and existing areas and sustainable use zones, empowers the fisheries sector, rehabilitates marine coastal ecosystems, builds resilience and climate change adaptation, and innovates sustainable blue economy business models. In the case of the Seychelles, innovative blue financing creates better management of the ocean while including the livelihoods at stake. Using a national organization, like SeyCCAT, maintains power over these funds by using them in the best interest of the people who depend on the ocean. As it did in the Seychelles, blue financing opportunities can open doors to island and coastal nations for better, more inclusive management of the ocean and its natural resources.
Big ocean states like the Seychelles are leading the way with mutual gain approaches despite failed climate negotiations at the international level. Closing out the Blue COP with a win-win for both people and the ocean provides much needed hope for a sustainable future, and small island leaders are to thank for that.