News
The Blue Economy – Already Making a Splash
Publication Date: 05/06/2025
The opportunities are abundant, and the potential impact could be decisive.
By Aliou Maiga and Bongiwe Kunene
We never know the worth of water until the well is dry. This proverb, which reminds us to value our assets before they’re gone, has always resonated in Africa. Water is essential to African life and there’s real danger in taking this valuable resource for granted.
The blue economy, which includes all aquatic resources in both marine and freshwater environments, as well as water infrastructure and management, is critically linked to jobs, food security, and access to safe and clean water in the 16 economies of the Southern African Development Community (SADC).
According to the African Union, it generates nearly $300 billion for the continent as a whole and sustains 49 million jobs in sectors such as agriculture, fishing, shipping, and tourism.
However, this natural wealth is becoming increasingly threatened by extreme weather, pollution, biodiversity loss, overfishing, and pressure from growing urban populations. If we don’t act now to protect our blue resources, it could have dire consequences for SADC economies in the future.
Shades of blue
One solution lies in developing a market for blue finance, an emerging theme in sustainable finance with mounting interest from investors, financial institutions, and issuers globally.
Blue bonds and blue loans are targeted financing instruments designed to mobilise funds and support investments in water and wastewater infrastructure, reducing ocean plastic pollution, restoring marine ecosystems, sustainable shipping, ecofriendly tourism, and offshore renewable energy development.
Recent market research by the International Finance Corporation (IFC) indicates that blue commercial lending opportunities in seven key African economies are worth at least $10 billion, with $2 billion (R35.6 billion) in South Africa alone.
The Seychelles has already proved the viability of blue finance, issuing the first sovereign blue bond in the SADC region in 2018 to raise $15 million from international investors for financing the sustainable use of marine resources.
Just weeks ago, in May, Angola followed suit by issuing a $64 million sovereign bond aimed at financing 43 dam projects in the southern province of Namibe to enhance climate resilience and support rural development.
How do we make it possible for more countries to follow their example?
On the one hand, regulatory authorities could incorporate globally accepted blue finance guidelines into national sustainable taxonomies
and regulations.
Before the well runs dry
To label a financial instrument as a blue bond or blue loan it must comply with relevant market standards, for example the Blue Finance Guidelines developed by the IFC in 2022 and endorsed by the International Capital Market Association (ICMA) and the Loan Market Association.
The IFC is currently updating these guidelines, and the new version will be publicly available later this year for all to reference.
Financial institutions should ready themselves for this market segment by studying the market, learning from leaders, and seeking expert advice.
For example, the Practitioner’s Guide on Bonds to Finance the Sustainable Blue Economy – developed by the IFC, the International Capital Market Association, Asian Development Bank, UN Environment Programme Finance Initiative and the UN Global Compact – is a guide that builds on existing global market standards and provides a general overview on globally accepted blue finance definitions and eligibility criteria, adding confidence for issuers, investors, and underwriters involved.
The opportunities are abundant, and the potential impact could be decisive for millions of jobs and livelihoods in the SADC region.
It’s high time we value the blue economy. Before the well runs dry.