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Coast counties moot blue bonds for marine protection
Mining, Blue Economy and Maritime Affairs Cabinet Secretary Hassan Joho addresses the public during Eid Baraza held at Treasury Square in Mombasa County.
The six counties in the former Coast Province are planning to issue a blue bond for environmental conservation and preservation of marine life.
Blue bonds are a debt instrument specifically used to finance projects related to ocean conservation and sustainable marine ecosystems.
Cabinet Secretary for Mining, Blue Economy and Maritime Affairs Hassan Joho told a delegation of the Mombasa Ocean Festival of plans to issue the new type of bond, which has drawn the interest of other groups including conservationists.
“We as coast counties, must now have a conversation about sea carbon. We will work together to introduce a municipality bond but in the blue space. It’s called a blue bond,” Mr Joho said.
“Our sea weed can no longer be something to waste. Other countries have successfully floated blue bonds, and they have securitised these bonds that benefit the people and we too can do it,” he added.
Under the Public Finance Management (PFM) Act, 2012, counties can borrow funds, but this is subject to approval by the national government and adherence to set fiscal responsibility principles. The PFM Act outlines that any borrowing by county governments must be approved by the county assembly and guaranteed by the national government.
If successfully executed, this will be the first blue bond issued by counties in Kenya.
Global environmental nonprofit group The Nature Conservancy had in 2020 announced a deal to issue a blue bond featuring the restructuring of the Kenyan government's debt with the aim of channeling the savings to improving marine ecosystems.
The project proposed buying about $460 million (Sh59.4 billion) of the government's debt from creditors and subsequently renegotiating the terms of the debt with the borrower.
The project was expected to result in approximately €30 million (Sh4.3 billion) of debt savings for the government over nine years.
It is not clear whether the blue bond, which received the backing of the United States International Development Finance Corporation (Dfc), was implemented.
