Into the blue: Financing Instruments to scale the Blue Economy

This content was produced by Standard Chartered and the article was originally published on Zebra – Magazin für Sustainable Finance [DE].

Transforming the blue economy represents a significant opportunity to contribute to our global climate and nature goals. The blue economy itself employs over 61.8 million people¹, and 80% of global trade relies on maritime transport, reflecting our dependence on oceans. Beyond commerce, oceans play a critical role in combatting climate change, from sequestering ~25% of CO₂ emissions to absorbing excess heat. Despite this, marine conservation and sustainable development remain underfunded, with an estimated funding gap of at least USD900 billion by 2030.

Solutions to support a sustainable blue economy have grown, with specific financing mechanisms to generate scale. Whilst some solutions are well-established and require scaling to generate greater impact, such as offshore wind energy, others are nascent but showcase strong investment potential, such as algae-based biofuels and packaging.

New and innovative financing models are key

Given the diversity of sectors included in the blue economy, tailored financing solutions are essential. Traditional models such as loans and bonds are being adapted, with specialised instruments like blue bonds and blue KPI-linked financing emerging.

Debt-for-nature swaps can address the triple burden faced by many sovereigns, namely high debt burdens, the costs of climate change and the loss of critical nature. Leveraging blended finance credit enhancement, these structures can de-risk investments and attract private sector capital, enabling sovereigns to refinance debt cost-effectively while meeting specific nature and climate targets. Savings can be channelled towards marine conservation.

Standard Chartered recently partnered with The Bahamas, The Nature Conservancy, the Inter-American Development Bank, Builders Vision, and AXA XL to launch an innovative debt conversion for nature. A USD300 million Standard Chartered loan refinanced a portion of the country’s external debt at a reduced interest rate and is expected to generate USD124 million in savings over 15 years. The funds will support marine conservation and ocean resource utilisation projects, enhancing environmental resilience and bolstering the economy.

Growing appetite for blue economy investments Investor interest in the blue economy is rising. Private sector investments are increasingly directed towards renewable energy, water management, and marine biotechnology, with approximately USD6 billion allocated through private market funds. Open-ended equity funds focusing on water management now manage around USD45 billion in assets, delivering returns competitive with the MSCI AC World Index.

Institutional investors, including pension funds, are recognizing the importance of sustainable investments and are incorporating environmental risks into their portfolios. Blue finance and impact investing funds are gaining traction, channelling capital into initiatives which protect our oceans.

Political support is critical

Governments and regulatory bodies are playing a vital role in shaping the future of blue financing. International agreements such as the UN Convention on the Law of the Sea (UNCLOS) and the Biodiversity Beyond National Jurisdiction (BBNJ) Agreement are creating binding frameworks for sustainable ocean use. National and supranational programmes like the EU’s ‘Restore our Ocean and Waters’ and Green Deal initiatives are driving investments through subsidies, tax incentives, and regulatory support.

These efforts can make sustainable business models more attractive, supporting the reduction of investment risks and facilitating market entry for companies within the blue economy. By aligning policy incentives with investment trends, governments can accelerate the transition toward a sustainable blue economy.

2025: a unique opportunity to scale blue finance

This year offers a unique chance to scale finance for the blue economy and unlock its potential. Key events like the Blue Economy and Finance Forum and the 2025 UN Ocean Conference will drive commitments and new financial instruments. A wave of action, supported by political will, innovative financing, and investor demand, can make a sustainable blue economy central to global economic and environmental prosperity.

Oliver Withers
Head of Nature at Standard Chartered

Oliver Withers joined Standard Chartered in 2023 and works across the Bank to integrate nature considerations into decision-making and mobilize finance for nature. Previously, he was Global Head of Biodiversity at Credit Suisse and before that he served as Head of Conservation Finance and Enterprise at the Zoological Society of London.

¹ FAO (2024): The State of World Fisheries and Aquaculture 2024: Blue transformation in action, Exec. Summary