The Commonwealth Secretary-General has welcomed plans to establish a new Centre of Excellence in Oceanography and the Blue Economy at the University of West Indies Five Islands Campus in Antigua and Barbuda.
The Government of Antigua and Barbuda, which co-chairs the Commonwealth Blue Charter Action Group on Sustainable Blue Economy, the University of the West Indies and the Association of Commonwealth Universities agreed to work together towards this goal, with a memorandum of understanding signed today.
The Centre will aim to advance intellectual progress and strengthen institutional capacity in the areas of marine science and the blue economy for the Caribbean region.
Signed by Prime Minister Gaston Browne of Antigua and Barbuda, Vice-Chancellor of The University of the West Indies Hilary Beckles and Chair of the Association of Commonwealth Universities Ed Byrne, the MoU also allows the three parties to develop joint research, training and capacity-building programmes, as well as share academic and educational content.
Hailing the initiative, Secretary-General Patricia Scotland said: “The Government of Antigua and Barbuda is co-champion of the Action Group on Sustainable Blue Economy, and the bold initiative of developing a Centre of Excellence for Oceanography and the Blue Economy…will build in new ways on this commendable commitment.
“This new Centre of Excellence will be a fresh expression of our longstanding Commonwealth concern for the environment, including our ocean, and the clarion call to action made in the Langkawi Declaration on the Environment from the Commonwealth Heads of Government Meeting as long ago as 1989.”
She stressed the Commonwealth Secretariat’s “wholehearted support”, adding: “I welcome the new opportunities for Commonwealth cooperation which the Centre will open up and mobilise – particularly for our young people.”
As part of the Commonwealth Blue Charter, Antigua and Barbuda (alongside Kenya) co-champions member-driven actions that encourage better stewardship of the ocean’s ‘blue resources’ and marine environment.
Launched in 2018, the Commonwealth Blue Charter is a commitment by leaders of the organisation’s 54 member countries to actively collaborate on solving ocean-related challenges.
The Commonwealth Blue Charter is highlighting case studies from the Commonwealth and beyond, as part of a series to spotlight best practice successes and experiences. To share your own case study, please contact us.
“Seychelles’ Blue Economy experiences and successes to date have shown how crucial partnerships can be, especially raising innovative finance and investment. The world’s first Debt Swap for Ocean Conservation and Climate Adaptation and first sovereign Blue Bonds attest this.” Seychelles President Danny Faure, November 2018
Seychelles’ current and future prosperity is intrinsically linked to its marine and coastal assets. However, the 2008 financial crisis left the country with substantial debts and made it difficult to invest in the Blue Economy. An innovative approach to financing was required to gain the most value from Seychelles’ marine and coastal assets as part of a sustainable Blue Economy.
Seychelles pursued an ambitious plan to finance sustainable development of the Blue Economy, through converting US$21.6 million of national debt via the world’s first Blue Economy debt for nature swap, and through launching the world’s first sovereign blue bond. Seychelles’ Conservation and Climate Adaptation Trust (SeyCCAT) was established to competitively distribute funds from these initiatives to support the management and expansion of the Seychelles Marine Protected Areas (MPAs), sustainable fisheries and other activities that contribute to the conservation, protection and maintenance of biodiversity and adaptation to climate change.
These ongoing initiatives have been very successful. With the support of The Nature Conservancy, the debt conversion enabled the Government of Seychelles to make a policy commitment to safeguard 30 per cent of its Exclusive Economic Zone through MPAs. The Blue Bond raised US$15 million from international investors, demonstrating the potential for countries to harness capital markets for financing the sustainable use of marine resources. The Seychelles Blue Economy Strategic Policy Framework and Roadmap was key to the success of the Blue Bonds Plan, providing a clear plan on how the funds would be invested prior to the bonds being issued. Three rounds of the SeyCCAT Blue Grants Fund have already occurred, with the fourth due to open on 6 July 2020. Five SeyCCAT projects have been completed successfully and there are more than 20 on-going SeyCCAT partnerships and projects.
- Seychelles has an Exclusive Economic Zone (EEZ) of 1.37 million km2 (compared with a land area of just 455 km2 ). As a result, Seychelles’ current and future prosperity is intrinsically linked to its marine and coastal assets.
- The effect of the 2008 global financial crisis was hard felt in Seychelles, with the government facing repayment challenges with total public debt reaching more than 150 per cent of gross domestic product. This debt was restructured under the Paris Club and Seychelles initiated a five-year economic reform programme.
- The Seychelles Blue Economy Strategic Policy Framework and Roadmap: Charting the Future (2018–2030) was developed to guide development of the Seychelles Blue Economy and was approved in January 2018. The Strategic Policy Framework and Roadmap provides an integrated approach to ocean-based sustainable development bringing together economy, environment and society.
- One of the four pillars of the Strategic Policy Framework and Roadmap is “Economic diversification and resilience”, which links to one of the sought-after outcomes: increased investment in diversification of existing ocean-based economic sectors to realise greater value and efficiency.
- The need for greater investment in the Seychelles Blue Economy to achieve the goals and desired outcomes of the Strategic Policy Framework and Roadmap required an innovative approach to Blue Economy financing.
Blue Bonds Plan
- In 2018, Seychelles launched the world’s first sovereign blue bond, designed to support sustainable marine fisheries and fisheries projects.
- Proceeds from the bond will support the expansion of Marine Protected Areas (MPAs), improved governance of priority fisheries and development of the Seychelles Blue Economy.
- Grants and loans will be provided through the Blue Grants Fund and the Blue Investment Fund, managed respectively by Seychelles’ Conservation and Climate Adaptation Trust (SeyCCAT) and the Development Bank of Seychelles (DBS).
Debt for nature swap
- The Government of Seychelles sought to undertake the world’s first Blue Economy debt for nature swap, with the aim of converting US$21.6 million of national debt
- Multiple benefits from the debt for nature swap were envisaged, including: Financing for adaptation to climate change through management of coasts, coral reefs and mangroves; Promoting implementation of a Marine Spatial Plan (MSP) for the entire Seychelles EEZ; Approximately 400,000 km2 managed for conservation as MPAs within five years; Implementing the MSP, setting ground rules for what is permitted and where within Seychelles;
- The project structure included four major milestones; financial negotiations with creditors; national stakeholder consolations; creation of an MSP; and executing the Conservation Actions.
The Seychelles’ Conservation and Climate Adaptation Trust:
- SeyCCAT was established in November 2015 to achieve conservation through innovative finance and creative collaborations.
- SeyCCAT provides sustainable funds to support the management and expansion of the Seychelles MPAs, sustainable fisheries and other activities that contribute to the conservation, protection and maintenance of biodiversity and adaptation to climate change.
- Proceeds from the Seychelles Blue Bond further capitalise the SeyCCAT Blue Grants Fund to support sustainable-use MPAs and improved governance of priority fisheries.
- SeyCCAT’s assets are projected to enable the competitive distribution of US$700,000 per year, and the Trust is investigating the feasibility of a Blue Challenge Fund and a Blue Equity Fund.
- SeyCCAT is committed to developing strong and lasting creative collaborations to advance its mission and to enable the delivery of five objectives to: Support new and existing MPAs and sustainable use zones; Empower fisheries with robust science to improve governance, sustainability, value and market options; Promote the rehabilitation of habitats and ecosystems that have been degraded by human impacts; Develop and implement risk reduction and social resilience plans to support climate change adaptation; Develop business models to secure the sustainable development of Seychelles’ Blue Economy.
For more information about SeyCCAT, see https:// seyccat.org/
Partnerships and support
Blue Bonds Plan
- The Seychelles Blue Bond was announced in 2018.
- The business case for a sovereign blue bond was identified through support from the Prince of Wales’ Charities International Sustainability Unit.
- Standard Chartered acted as placement agent for the bond and Latham & Watkins LLP advised the World Bank as external counsel. Clifford Chance LLP acted as transaction counsel.
- A World Bank team comprising experts from its Treasury, Legal, Environmental and Finance groups worked with investors, structured the blue bond and assisted the government in setting up a platform for channelling its proceeds.
- The Bond is partially guaranteed by a US$5 million guarantee from the World Bank (International Bank for Reconstruction and Development) and further supported by a US$5 million concessional loan from the Global Environment Facility (GEF), which will partially cover interest payments for the bond.
- The three international investors in the bond were Calvert Impact Capital, Nuveen and U.S. Headquartered Prudential Financial Inc.
- SeyCCAT is tasked with managing US$3 million of the US$15 million of the blue bond proceeds. DBS is managing US$12 million
Debt for nature swap
- The debt for nature swap was made possible by private funders, including the China Global Conservation Fund of The Nature Conservancy, the Jeremy and Hannelore Grantham Environmental Trust, the Leonardo DiCaprio Foundation, the Lyda Hill Foundation, the Oak Foundation, Oceans 5, the Turnbull Burnstein Family Charitable Fund and the Waitt Foundation. • Collaborators on the initiative include the governments of Belgium, France, Italy, South Africa and the UK, the United Nations Development Programme (UNDP), GEF and the Global Island Partnership. • The policy commitment to safeguard 30 per cent of the Seychelles EEZ through MPAs was financed partially through debt conversion with the support of The Nature Conservancy.
- The debt for nature swap project was a multi-step process, starting with policy commitments in 2012 and ending with SeyCCAT investing in local projects to enhance Blue Economy development in 2017.
The Seychelles’ Conservation and Climate Adaptation Trust
- SeyCCAT was established through the Conservation and Climate Adaptation Trust of Seychelles Act, 2015. SeyCCAT is a long-term, on-going initiative.
- SeyCCAT was initially capitalised with proceeds from the Government of Seychelles’ US$21.6 million debt conversion that was completed in 2015.
- SeyCCAT also attracts capital from philanthropic organisations and continues to seek other innovative mechanisms to boost its assets.
- Current partners with SeyCCAT include Pew Charitable Trusts, The Nature Conservancy, the World Bank, UNDP, the Government of Seychelles, the Western Indian Ocean Marine Science Association and local partners.
Results, accomplishments and outcomes
Blue Bonds Plan
- The bond raised US$15 million from international investors, demonstrating the potential for countries to harness capital markets for financing the sustainable use of marine resources.
- US$3 million of the proceeds from the bond are managed through SeyCCAT to support the management and expansion of Seychelles MPAs, sustainable fisheries and other activities that contribute to the conservation, protection and maintenance of biodiversity and adaptation to climate change.
- Proceeds from the bond contribute to the World Bank’s South West Indian Ocean Fisheries Governance and Shared Growth Program, supporting countries in the region to sustainably manage their fisheries and increase economic benefits from fisheries.
- The Blue Bond proceeds are issued to SeyCCAT through six tranches of US$500,000 from 2018 to 2023.
Debt for nature swap
- The journey towards the successful debt for nature swap started in 2012, when Seychelles committed to 30 per cent marine protection at Rio+20; 2013: the proposed debt restructure was discussed between the Seychelles President and the Prince of Wales; 2014: the delegation for Seychelles met main bank bilateral creditors and discussed plans to swap a portion of its external debt for funding for coastal/marine conservation projects; 2105: the Seychelles Government held discussions with key local stakeholders about MSP, and with Paris club creditors, announced the closing of the first-ever debt restricting for climate adaptation; 2016: the Government of Seychelles paid creditors to buy back their debt via a loan from SeyCCAT, funded by grants and a loan from The Nature Conservancy; 2018: SeyCCAT invested in local schemes to protect the offshore environment around the Seychelles archipelago.
- With support from The Nature Conservancy, the debt conversion enabled the Government of Seychelles to make a policy commitment to safeguard 30 per cent of its EEZ through MPAs.
- The debt service payments from the debt for nature swap fund three distinct cash flows: Repayment of the impact investor NatureVest; The SeyCCAT Blue Grants Fund, which amounts to an annually distributed US$200,000; Capitalising the SeyCCAT endowment fund with US$151,000 per year, with an expected matured value of US$6.7 million. In total, from the proceeds of the debt swap and the blue bond, SeyCCAT can annually distribute US$700,000.
The Seychelles’ Conservation and Climate Adaptation Trust
- Three rounds of the Blue Grants Fund have already occurred, with the fourth opened on 6 July 2020.
- Five SeyCCAT projects have already been successfully completed, on topics such as knowledge and impacts of artisanal fisheries, a fish identification initiative, restoration of commercially important lobster habitat and developing Blue Economy entrepreneurs.
- There are more than 20 on-going SeyCCAT partnerships and projects. These span a diverse array of topics, including science and management in fisheries, blue carbon, business development, scholarship and internships, science to support coral conservation, mangrove mapping and monitoring, climate change social adaptation, MPA development, plastic pollution and seabird and shark conservation. See https://seyccat.org/projects/
- Whilst SeyCCAT exists to develop the Seychelles Blue Economy, the Trust is also committed to sharing learning experiences with other island and coastal states across the Western Indian Ocean.
Accessibility and inclusivity: Making funds available does not guarantee that people or organisations have the capacity to apply for those funds. The Blue Grants Fund is supported by international donors and organisations, who may not always appreciate the local challenges in applying for those funds. For example, the application form was based on a standard EU format that experienced non-governmental organisations may be able to use but local Seychelles stakeholders may not. Steps taken by SeyCCAT to make the application process more accessible and inclusive include:
- Removing language barriers: In 2019, SeyCCAT translated the application form into Creole (the local language) enabling people to apply in their native language.
- Reaching out proactively: As well as the threeislands public meeting to attract potential applicants, SeyCCAT also conducted one-to-one meetings and in-person visits with fishing communities, students, young female entrepreneurs, public sector representatives and other groups.
- Building capacity during the application stages: SeyCCAT and its partners have provided capacitybuilding sessions for the first application stage covering project and budget writing skills, project management, and monitoring and evaluation. The Project Preparation Grant also provides support at the second stage of application, and dedicated facilitators are available to support applicants through mentoring and training. For more information on fostering inclusion and accessibility, see https://seyccat.org/making-inclusionand-accessibility-a-reality/
Administrative concerns: Administering the Blue Grants Fund requires the dedication and enthusiasm of a fulltime team, with appropriate experience and training. The administration team also requires sustainable, long-term funding support. Monitoring and evaluation: To ensure the funds are as effective as envisaged, all Blue Grants Fund projects need to be monitored and evaluated, which requires a considerable amount of time and resources.
- External support for impact monitoring: The World Bank is looking to help SeyCCAT establish a framework to measure how Blue Grants Fund projects aid progress towards the Seychelles Blue Economy Strategic Policy Framework and Roadmap objectives and the Sustainable Development Goals.
- Capacity-building for impact monitoring: SeyCCAT is providing Blue Grant Funds projects with the capacity to conduct their own monitoring and evaluation on the success of their projects, through accessible spreadsheets.
Key lessons learnt
Simultaneously invest in capacity. The Blue Bonds have only a six-year disbursement period, and preparing the population so they are able to apply for funding and engage with other initiatives takes time. To make the best of the limited time the finances are available for, future initiatives could look to engage in capacity-building with the population as the deal is being established, so that, when the funds are available, the local capacity is already in place and the population is ready.
Seek sound and worthwhile investments. Finance initiatives need to be large enough to be worthwhile, but not so large as to be too great a risk. Small economies, such as Seychelles and many other island nations, can only absorb small risk. Larger investments mean there is more to lose. There needs to be a robust risk assessment prior to establishing finance initiatives.
Invest in a robust administrator. Sustainable long-term funding to support a good administrator is essential for the initiative to remain innovative and the funds to reach the target audience. Procurement monitoring is essential to ensure projects funds are being spent effectively and responsibly.
Implement environmental and social safeguards. Funding support from the World Bank and partners means that certain standards must be met. Serious consideration needs to be given to the way in which funds are applied, so that there are not any unintended consequences. Supporting new businesses is an important role of the Blue Grants Fund; however, in some cases this may have the potential to increase environmental pressure, which runs counter to the concept of a sustainable Blue Economy, so caution and oversight must be exercised.
The Caribbean island nation of Antigua and Barbuda has stepped forward to co-champion the Commonwealth Blue Charter Action Group on the sustainable blue economy, alongside the current champion country, Kenya.
As a new co-champion, Antigua and Barbuda will work with Kenya, as well as the other action group members, to cooperatively develop sustainable blue economy strategies across Commonwealth countries, covering more than a third of the world’s coastal waters.
The aim of a ‘blue’ economy is to support the sustainable use of ocean resources for economic growth and improved livelihoods, while protecting ocean health.
Commonwealth Secretary-General Patricia Scotland said: “It is very encouraging that Antigua and Barbuda, a ‘large ocean state’, has stepped forward to co-champion the sustainable stewardship of our vast ‘blue wealth’. This welcome milestone demonstrates the commitment of Commonwealth countries to leveraging ocean resources wisely, sustainably and responsibly, while tackling unemployment, food insecurity and poverty.
“In this regard, the Commonwealth Blue Charter is one of the most effective platforms for countries to proactively collaborate across borders to tackle shared ocean challenges.”
Antigua and Barbuda’s Minister of the Blue Economy, Dean Jonas said: “We commend the Commonwealth on its development of the Blue Charter and in championing work on the sustainable blue economy.
“Antigua and Barbuda has long had a special relationship with the oceans. We are, however, keen to understand more about the potential of our oceans as an economic growth area as well as balance this with protecting and promoting the health of our oceans. Antigua and Barbuda is committed to being an active member of this action group working alongside Kenya and all states who are members of this group.”
Prof. Micheni Japhet Ntiba, Principal Secretary for the State Department for Fisheries, Aquaculture and the Blue Economy in Kenya added: “Kenya is very pleased to be able to welcome Antigua and Barbuda as a co-Champion. Kenya has long recognised the necessity to work together to build strong and resilient blue economies. We look forward to working with Antigua and Barbuda moving forward.”
Commonwealth Blue Charter
The Commonwealth Blue Charter is a commitment made by leaders of all 54 member countries to work together in tackling ocean challenges and fulfilling global commitments on ocean sustainability. It was endorsed at the Commonwealth Heads of Government Meeting in London, UK in April 2018.
Ten Action Groups, led by 14 countries, implement the Commonwealth Blue Charter, each focusing on a different ocean challenge, from marine pollution to climate change.
The Action Group on Sustainable Blue Economy encourages better stewardship of ocean resources through actions such as sharing strategies and best practices, promoting green and blue innovative technologies, and financial instruments such as blue bonds and blue carbon credits. The group also seeks to empower coastal communities economically, while building their resilience to future shocks.
The Commonwealth Secretary-General is urging governments to ensure their countries’ post-COVID economic recoveries are environmentally sustainable and safe for the ocean.
Forty-seven of the Commonwealth’s 54 member countries have a coastline while 25 are either small island developing states or ‘big ocean states’ relying heavily on the ocean for food and income.
Sustainable blue and green economies
On World Oceans Day (8 June), Secretary-General Patricia Scotland calls on countries to reform development strategies in a way that supports vibrant and sustainable blue and green economies.
She said: “The ocean is the life blood of so many Commonwealth countries and our environment should be the cornerstone as we put plans in place to recover our economies. The Commonwealth covers more than a third of coastal oceans in the world, contributing to a global ocean-based economy valued at US$3 to 6 trillion per year.
“COVID-19 impact has radically altered some of our key economic sectors and transformed the way we live, communicate and do business. While the fallout from the pandemic has had a huge impact on our blue economies, it also presents a crucial opportunity to strategise on how to accelerate the transition towards more sustainable economic practices built on climate resilience and ocean sustainability.
“The Commonwealth Blue Charter is one of the most effective platforms for global ocean action in the international landscape today. I commend the work of our member countries through the action groups and welcome the support we have received from national, regional and global partners, enabling us to mobilise together for ocean health.”
Blue Charter action groups
The Blue Charter is the Commonwealth’s commitment to work together to protect the ocean and meet global ocean commitments. Ten action groups, led by 13 champion countries, are driving the flagship initiative. More than 40 countries have signed up to one or more of these action groups, and counting.
Commonwealth Blue Charter action groups include:
- Sustainable Aquaculture (led by Cyprus)
- Sustainable Blue Economy (Kenya)
- Coral Reef Protection and Restoration (Australia, Belize, Mauritius)
- Mangrove Ecosystems and Livelihoods (Sri Lanka)
- Ocean Acidification (New Zealand)
- Ocean and Climate Change (Fiji)
- Ocean Observations (Canada)
- Commonwealth Clean Ocean Alliance (marine plastic pollution – United Kingdom, Vanuatu)
- Marine Protected Areas (Seychelles)
- Sustainable Coastal Fisheries (Kiribati)
Members of the private sector, academia and civil society – including Vulcan Inc, Bloomberg Philanthropies, the Association of Commonwealth Universities, Nekton Foundation and many others – are also engaged as Blue Charter partners.
Countries driving the Commonwealth Blue Charter project will meet in Cyprus from 21 to 24 March 2020. They will reflect on what they’ve achieved over the past year, and agree on a strategy for the coming year.
The Commonwealth Blue Charter is a landmark agreement by leaders to cooperate on ocean action. Since launching in 2018, 10 action groups led by 13 ‘champion’ countries have rallied Commonwealth members around pressing ocean issues like marine pollution, coral reef restoration and climate change.
Champion countries will share experiences, best practices and new ideas.
A 14-strong international panel working to accelerate action for ocean protection features seven Commonwealth member countries.
Australia, Canada, Fiji, Namibia, Ghana, Jamaica and Kenya all helped produce a report unveiled at the UN Secretary-General’s Climate Action Summit which found that ocean-based climate action can play a much bigger role in shrinking the world’s carbon footprint than was previously thought.
In fact it could deliver up to a fifth of the annual greenhouse gas emissions cuts needed in 2050 to limit global temperature rise to 1.5°C. Reductions of this magnitude are larger than annual emissions from all current coal fired power plants world-wide.
The report, launched in New York, is entitled ‘Ocean as a Solution for Climate Change: 5 Opportunities for Action’ and was produced by an expert international high-level panel made up of 14 heads of state and government.
The study is the first ever comprehensive, quantitative analysis into the role ocean-based solutions can play in the fight against climate change.
The report suggests the following solutions would help curb climate change, contribute to the development of a sustainable ocean economy, protect coastal communities from storms, provide jobs and improve food security:
- Scaling up ocean-based renewable energy – which could save up to 5.4 gigatonnes of CO2e annually by 2050, equivalent to taking over a billion cars off the road each year.
- Decarbonising domestic and international shipping and transport – which could cut up to 1.8 gigatonnes of CO2e annually by 2050.
- Increasing the protection and restoration of “blue carbon” ecosystems – mangroves, seagrasses and salt marshes – could prevent approximately 1 gigatonne of CO2e from entering the atmosphere by 2050.
- Utilising low-carbon sources of protein from the ocean, such as seafood and seaweeds, to help feed future populations in a healthy and sustainable way
Australia is investing AUD$70 million in the Blue Economy Cooperative Research Centre (CRC), a 10-year $329 million collaboration between 45 Australian and international partners to develop innovative and sustainable offshore industries to increase Australian seafood and marine renewable energy production.
Fiji is committing to making its shipping sector 100 per cent carbon-free by 2050 while Kenya will incorporate blue carbon ecosystems into its nationally determined contribution, in partnership with The Pew Charitable Trusts and WWF.
Namibia is committing an additional US$5 million towards ocean research and protection over 2019/2020.
The report comes on the back of significant progress on the Commonwealth Blue Charter, Agreed unanimously by leaders in April 2018, the Blue Charter commits all 53 member countries to work together on solving crucial ocean-related challenges.
To date, 12 ‘champion’ countries have stepped forward to rally fellow members around nine key areas, including marine pollution, ocean acidification and the sustainable blue economy.
‘Fiji is leading on the Blue Charter Action Group on ‘oceans and climate change’, Kenya on the ‘sustainable blue economy’, Australia is co-leading on ‘coral reef protection and restoration’ and Canada on ‘ocean observation’.
Commonwealth Head of Ocean and Natural Resources, Nick Hardman-Mountford, said: “This report unequivocally shows that ocean based climate action is integral to reducing the global carbon footprint.
“Commonwealth countries have already come forward with game changing commitments. The Commonwealth Blue Charter that all Commonwealth countries adopted last year provides an action-orientated collaborative mechanism for countries to address ocean issues. We look forward to working with the Commonwealth countries to share experiences, take real action and lead the way forward.”
Fiji Prime Minister Frank Bainimarama said: “Fiji is leading Pacific Island States in a united and visionary response to the ocean’s untapped potential to combat global warming.
“We are collectively committed to cutting 40 per cent of emissions from Pacific shipping by 2030, and we’re making our shipping sector 100 per cent carbon-free by 2050. Together, we’re moving towards managing our waters sustainably.”
‘This report was swiftly followed by a study from the Intergovernmental Panel on Climate Change (IPCC) which warned that humanity is in a race against the pace of climate change and our ability to respond to it and calls for urgent, ambitious and collaborative action.