The United Nations Capital Development Fund (UNCDF), in partnership with the Swiss Agency for Development and Cooperation (SDC), launched the Blue Peace Financing Structure for the first ever Blue Peace Bond. The event was held on January 19, 2023, during the World Economic Forum (WEF) in Davos.

This important launch is a key milestone in the implementation of the Blue Peace Financing Initiative, which promotes the access to public and private capital for the Gambia River Basin Development Organization (OMVG) for the implementation of its Master Plan and Joint Investment Plan.

The Blue Peace Financing initiative opens a new and innovative market in the Sustainable Finance field. It creates new ways for regional non-sovereign entities managing natural resource, such as river basin organizations, to access financial capital. It was therefore relevant to present it at the WEF as an important forward-looking solution and rewarding long-term investment.

“I am confident that we can tackle the global challenges of our time if we join forces and make use of innovative solutions, such as the Blue Peace Financing Initiative. As you probably understood, the Blue Peace Financing initiative has the ambition to be a game-changer in the way we consider investing in water for peace and sustainable development. It offers a new instrument to combine impact investment within new frontiers and with new players.” said Patricia Danzi, Director General, SDC.

Through the issuance of the first ever Blue Peace Bond, planned in 2023, OMVG will be able to mobilize financial sources for its Master Plan and joint investment plan, allowing the organization to implement the underlying projects more efficiently and effectively. This will benefit the local population in the member states. The underlying financing structure uses an approach similar to Green Bond financing to achieve better financing terms and market access, while considering risks and mitigation instruments and a credit enhancement mechanism.

“I see a difference, a positive one! The Blue Peace Bond has been designed with the investor’s perspectives in mind. Investors don’t like one-off investments. We’re really looking at projects that are scalable (so that amounts can go up) and replicable (so it can be copied and attract money easily). From that perspective, this initiative has all the important ingredients to be successful” said Mr. Hans-Ruedi Mosberger, Head Asset Management and Sustainable Finance, Member of Senior Management Swiss Bankers Association (SBA).

The OMVG Blue Peace Bond will finance a portfolio of projects that can reach up to USD 2 billion including infrastructure projects with a high impact on the economic empowerment of vulnerable populations as well as providing access to clean and affordable energy, safe drinking water, food security and other water-related services.

The session really showcased the innovation and sustainability of the Blue Peace Bond but also highlighted the potential of the OMVG Master Plan which is developed with a strong capacity building phase. Hence, impact measurement is also critical to be part of this whole mechanism especially for the replication of the initiative in other regions. This is where the Blue Peace Index comes in. It measures the extent to which countries and basins are managing their shared water resources in a sustainable, equitable and collaborative manner.

“Economist Impact and UNCDF are partnering to develop and scale up the Blue Peace Financing Initiative (BPFI) into a standardized mechanism for regional non-sovereign entities. Through a systematic framework, this readiness assessment will promote suitable investments by helping to identify key factors for successful deployment and replication of the Blue Peace Finance Initiative and measure impact by providing an outcome framework to observe, change and measure impact.” expressed Mr. Matus Samel, Senior Manager, Economist Impact.

The launch was a successful event and hosted interesting discussions and inputs from the audience. The Blue Peace Financing Initiative is already providing a new financial incentive for countries and sectors to cooperate and establish political agreements on the sustainable management of shared resources, reducing social, political, economic, and environmental risks and conflicts. It is also changing the financial sector’s perception of water, not as a distinct sector, but as an entry-point for multisectoral and regional impact investment opportunity. Hence, investing in Blue Peace supports the achievement of the 2030 and Addis Ababa Agendas while also transforming water from a potential source of conflict into an instrument of cooperation and peace.

The video of the session is available on https://youtu.be/zr9vHitewbk