Why does it matter? Oceans and rivers are essential to livelihoods and economies however they are experiencing increasing stress and degradation on a warming and polluted planet. If the ocean were a country, it would be the seventh largest economy in the world.

Although public money and NGOs are already engaging in conservation and ways to protect the environment, financial and private sectors are critical to turn the tide of the global economy towards protecting and valuing nature. Blue bonds are a way to engage these actors, and the fact that one of the largest economies in the world has created a blue bond indicates continued commitment to protect the planet while incentivising the financial system.

Defining blue bonds – A blue bond is most commonly a use-of-proceeds bond, which is a debt instrument issued by governments, development banks or companies that allow them to receive money for projects upfront that meet specific criteria to benefit the ocean and maritime sector. These proceeds are used exclusively for projects that are in line with the purpose outlined in the blue bond terms.

The investor who buys the blue bond in upfront cash is paid back firstly through regular interest payments over the life of the bond, and secondly through the return of the original upfront investment once a project has been successful and reaches maturity.

Benefits of issuing blue bonds – Benefits for a company such as Sagarmala Finance Corporation include the ability to access untapped capital for blue economy projects and enable long-term financing as well as becoming a leader in a new asset class, increasing their investor base and making them attractive for governments and companies to help.

For example, the Sagarmala Finance Corporation bonds are targeting INR20bn in equity infusion from the Indian government as it expands the loan book. This makes the opportunity more attractive for investors as debt-to-equity ratio has a buffer. Furthermore, a blue bond allows investors to know that their money has environmental impact that is transparent and traceable.

Blue bond growth – Blue bonds are much like green bonds, however they focus only on marine and coastal projects whereas green bonds focus on a wide range of projects with environmental impact. The green bond market has had rapid growth and currently stands at $1tn total issuance.

Experts expect to see this success mirrored in the blue bond market, which reached $15.25bn in cumulative issuances in June 2025. The world’s first sovereign blue bond launched by the Government of Seychelles with support from the World Bank in 2018 has proved successful, by increasing the management of a marine protected area by 17 million ha and improving fishing sector workflows.

Emerging markets – Most issuances of blue bonds are from emerging economies. This is exciting as emerging markets are widely expected to outperform developed markets in the future. If blue bonds are integrated, this creates a new standard for how our future economy functions valuing nature as well as money.

A key foundation of blue bonds is being able to report and measure the progress of a project, so you can confirm a project has reached maturity. Companies such as SOFAR, which own and develop ocean sensor networks and tools are key to uphold the credibility of this emerging asset class, ensuring high-quality, reliable and comparable data. Integrating ocean policy and bond frameworks will also be essential to maintain growth.

Looking forward – India’s first blue bond is a sign that financial markets are beginning to recognise oceans, rivers and coastal ecosystems as essential economic infrastructure. As blue bonds mature into a recognised asset class, their success will depend on the same fundamentals as any bond including credible data, clear standards and investor confidence but with an added imperative – the planet cannot afford for this market to fail.