IFC, a member of the World Bank Group, and T. Rowe Price announced plans to create a pioneering global blue bond strategy to increase access to finance for blue projects in emerging markets and help improve market standards for the nascent blue bond market.
The proposed T. Rowe Price Emerging Markets Blue Economy Bond Strategy (T. Rowe Price Blue) is expected to mobilize international capital from eligible investors to support blue-labeled investments in emerging markets globally through blue bonds issued by financial institutions and real sector companies.
“The investor capital deployed into blue bonds through T. Rowe Price Blue will make a vital contribution to furthering a blue economy,” said Makhtar Diop, IFC Managing Director. “This first-of-its-kind strategy with a dedicated vehicle for blue investment will also be critical in promoting sustainable capital markets in emerging markets and developing economies.“
Blue investments seek to provide competitive returns while supporting the health, productivity, and resilience of the world’s oceans and water resources, which are vital for sustainable global development, especially in the face of climate change, overfishing, and pollution. Momentum is growing for blue finance, with interest from both investors and issuers in blue bonds and loans that fund ocean-friendly projects and safeguard clean water resources.
“We are proud to partner with IFC to further the blue economy,” said Rob Sharps, CEO and president of T. Rowe Price. “We’re gratified that our emerging markets investment experience can be leveraged in such a meaningful, innovative, and important way, providing opportunities for positive investment returns while supporting sustainable capital markets and preserving valuable water resources for generations to come.“
The proposed T. Rowe Price Emerging Markets Blue Economy Bond Strategy will draw on IFC’s leadership in the blue bond market. Since 2020, IFC has invested and mobilized more than US$1.4 billion through 12 blue bonds and loans issued by private sector financial institutions and real sector corporates across emerging markets and developing economies.
To bolster the supply of blue bonds issued by real sector borrowers, T. Rowe Price Emerging Markets Blue Economy Bond investment activities will be complemented by a Technical Assistance Facility, or TAF, managed by IFC, designed to increase the quality and quantity of blue bond issuance in emerging markets.
By partnering on this innovative strategy, T. Rowe Price and IFC are sending a clear message to the market on the importance of mobilizing capital needed to make meaningful progress towards achieving the Sustainable Development Goals. Specifically, UN SDG 6 “ensure availability and sustainable management of water and sanitation” and SDG 14 “conserve and sustainably use the oceans, seas and marine resources”.
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To ensure that the mobilized resources achieve the desired impact objectives, IFC and T. Rowe Price have jointly developed Blue Impact Investment Guidelines that will be implemented specifically for this strategy. These guidelines are aligned with IFC’s Guidelines for Blue Finance which were published in January 2022 to guide IFC’s own investments in support of a Sustainable Blue Economy.