Page 83 - Economia Azul - versão: inglês

Table 2. Brief description of the main financial instruments Among the examples of financial mech- provides special green investment funds
anisms oriented to the marine area, blue that are exempt from income tax, thus al-
Instruments/Type Description and Main Actors/ bonds have been gaining prominence on lowing investors in green projects, such as
of Capital Main Features Providers the Blue Economy agenda. This type of in- green shipping, to borrow at reduced inter-

Impact Investment These are usually long- Philanthropic foundations, vestment specifically supports projects that est rates (generally ~2% below commercial
(Investment in Corporate term investments, but on NGOs, international directly contribute to the development of rates). These Dutch green funds have al-
Social Responsibility, Public a small scale compared to financial institutions, a sustainable marine environment. Blue ready attracted more investment than can
Grants, Philanthropic larger types of commercial corporations, official bonds can be in the form of sovereign be used in the available schemes – an en-
Grants, Public Financing finance. Expected rates of development assistance bonds, such as bonds issued by the Re- couraging sign for the future prospects of
and Official Development return are generally lower (ODA) agencies. public of Seychelles in 2018 to create a such instruments.
Assistance) than market rates.
fisheries management plan and improve Finally, another type of financing that
Debt (Loans and Bonds) Low-risk, low-return types Private and public sector, fishing practices. Other types of bonds has recently gained prominence is seed
of capital that offer low or e.g. governments, can be issued, for example, by financial investing, mainly focused on innovation in
market rates of return. They companies, multilateral
are variable in scale, from development banks. ODA institutions to support projects of this na- ocean industries. Currently, there are differ-
microfinance to large-scale agencies, blue bonds, ture. Multilateral Banks and Institutions, ent institutions that act as financiers of ear-
corporate lending. crowd funding. such as the World Bank, Inter-American ly-stage companies, contributing with seed
Equity (Public Equity and Equity capital involves Private financial sector, e.g. Development Bank (IDB), and European investing, venture capital and business sup-
Investment in Shares - taking a stake in an equity investors, venture Investment Bank (EIB), among others have port via incubators and accelerators. Such
Investment Funds) investment. Some types capitalists, commercial specific lines for sustainable economic de- institutions direct invest in sectors such as
of stocks are high-risk, banks, pension funds. velopment in the oceans. marine biotechnology, sustainable fisheries
high-return, and may In terms of initiatives at the national and aquaculture, and waste management
offer higher returns than level, it is noteworthy that the Netherlands (PEREIRA, 2020).
the market. The scale of
equity is highly variable,
ranging from microfinance 4. Final considerations and recommendations
to multimillion-dollar
investments.
Blended Finance It combines official The same providers as for A sustainable Blue Economy requires a se- of establishing these mechanisms in the im-
development assistance debt, equity and impact ries of interventions to improve governance, plementation process, applicability to cer-
with other private or capital. science and management, in such a way that tain sectors and results obtained from pre-
public resources in order the economic and financial areas are import- vious experience, in order to assess wheth-
to “leverage” additional ant vectors to promote this development. er there has been an effective change in
funds from other actors. It
generally provides below There is a great expectation for the growth of behavior towards more sustainable prac-
market rates of return. marine industries, and the measures adopted tices. Regarding financial instruments, it
must prioritize economic growth combined seems that, even with the availability of
Subsidies Financial assistance, Financial assistance, with the sustainable use of natural resourc- investment models for the Blue Economy,
commonly provided commonly provided
by governments, to an by governments, to an es, ensuring the continuity of the provision the scale of investment in sustainability is
economic sector in order economic sector in order of ecosystem services on which ocean-based low and remains dominated by philanthro-
to promote economic and to promote economic and productive activities depend. py and official development assistance,
social policy. social policy. As for economic instruments, it is im- particularly in emerging sectors. This is in

Source: OECD (2017) and Friends of Ocean Action (2020) portant to consider the costs and benefits line with recent studies that inform that

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80 Economic and Financial Instruments 81