India's First Blue Bond Issuance by Sagarmala Finance

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Key takeaways

Sagarmala Finance Corporation Limited (SMFCL) is launching India's first blue bond to raise Rs 600 crore over a 10-year tenure.
Blue bonds act as specialized green debt tools designed to mobilize capital for ocean conservation, green ports, and marine infrastructure.
Gujarat's Vadodara Municipal Corporation plans to issue Rs 200 crore in blue bonds, extending water-focused financing to municipal markets.
Globally, Seychelles created the first sovereign blue bond in 2018, while Belize executed a debt-for-ocean swap in 2021.

India is entering the blue finance market by launching its first blue bond through Sagarmala Finance Corporation Limited (SMFCL).
SMFCL functions as India's premier Non-Banking Financial Company (NBFC) focused specifically on the maritime sector.
This bond initiative aims to gather long-term capital to fund sustainable maritime infrastructure and ocean economy projects.

The primary issue aims to collect Rs 600 crore using 10-year debt instruments.
This structure includes a base issue alongside a greenshoe option of Rs 500 crore to handle extra investor demand.

Blue bonds are specialized financial tools that fall under the broader category of green bonds.
They gather money specifically to preserve and sustainably manage ocean and freshwater ecosystems.
These bonds fund projects in sustainable shipping, ocean-based renewable energy, and marine conservation.
They also support initiatives in sustainable fishing, water recycling, and coastal mapping.

The corporation plans to spend the raised funds during the current financial year.
The capital will support loans in the maritime sector, build new greenfield ports, and expand coastal road networks.

The issuer chose SBI Capital Markets as the official arranger for this market offering.
The arranger will secure investment commitments from long-term institutions such as insurance companies and provident funds.

In Gujarat, the Vadodara Municipal Corporation plans to raise nearly Rs 200 crore using blue bonds.
This move marks the entry of ocean and water-focused borrowing into urban local body debt markets.

Seychelles launched the world's first sovereign blue bond in 2018 under the World Bank's SWIOFish3 project.
Belize completed a debt-for-ocean swap in 2021 to fund its marine ecosystem conservation work.