How does Blue Bond work?
Like every financial bond, the bond issuer must have a source of revenue from which it can pay the interest on the capital investment made by an investor. Similarly, Blue Bonds earn income from investing in blue economies and sustainability projects. These Blue Bonds are also commonly referred to as Use of Proceed Bonds, and China and the Nordic Investment Bank, and the Republic of Seychelles had already issued blue bonds. In a nation, a Blue Bond can be issued by the Central Government, Banks, or Corporations.
Projects Funded by a Blue Bond:
A Blue Bond funds a variety of sustainability ocean projects leading to develop a blue economy. However, the category of projects approved under the blue bond varies under each nation’s internal rules and regulations. Also while finalizing a project under Blue Bond it’s taken care that the project doesn’t harm the aquatic creatures or spoil water quality by any means. Some of the commonly funded categories of projects under the Blue Bonds are Fisheries, Tourism, Aquaculture, wastewater sanitation, shipping, Ecosystem management, restoration, etc.
Benefits of Investing in Blue Bonds:
- There is plenty of water available on the earth and it has been observed that sectors related to oceans and rivers are quite flourishing. Thus investing in Blue Bonds can earn decent interest on your investment.
- Apart from making a decent profit from Blue Bonds it also allows you a chance to indirectly contribute to a social cause and sustainability.
- Unlike other thematic bonds, there is a lesser risk of loss in Blue Bonds as it’s backed by the government and many other authorities.
- World Bank provides free credit guarantees to the investors of the Blue Bonds.
Blue Bonds
As an investor, plenty of options are available for capital investment. One can invest in mutual funds, Inflation Index Bonds (IIBs), Stock market, Cryptocurrencies, etc. But these investments profit the investor and do nothing for a social cause. But now you can invest in Blue bonds and Green Bonds that will help you gain a decent interest in your capital investment and also help you protect the natural ecosystem.