The main barrier to scaling marine solutions is not a shortage of capital or ideas, but a lack of financial and institutional mechanisms to turn them into investable projects, said Ocean finance experts meeting in Türkiye ahead of November’s COP31 climate talks.
By making Oceans and Seas a priority under its Action Agenda, COP31 host Türkiye has put the challenge of funding marine and coastal resilience as one if its priorities for implementation. The presidency wants to advance cooperation on blue carbon, ocean observation, data sharing, finance and implementation partnerships, but turning those priorities into projects will require more than political ambition.
“It’s very easy for us to forget that once capital unlocks, it needs to have returns,” said Tony Worby, Australia’s Sherpa, or representative, to the High-Level Panel for a Sustainable Ocean Economy. “We might have lots of investment ideas for the ocean, but if you’re looking for capital, and someone is looking to invest their capital, they’re looking for some kind of return.”
Those returns need not always be purely financial, he told a breakout session on ocean governance at the meeting. Philanthropic or mission-driven investors may seek measurable environmental or social outcomes, while commercial investors generally expect interest payments, dividends or growth in asset value.
Between those ends of the spectrum are forms of concessional and first loss capital that can take greater risks or accept longer timeframes in order to make projects viable.
Kilaparti Ramakrishna, senior adviser to the president and director on ocean and climate policy at Woods Hole Oceanographic Institution (left) and Tony Worby, Australia’s Sherpa to the High-Level Panel for a Sustainable Ocean Economy at an oceans governance breakout session at the Blue Dialogue meeting in Trabzon, Türkiye. Image: Eco-Business/ Hannah Fernandez
The problem, Worby said, is that many ocean initiatives remain too small, too early-stage or too poorly prepared to attract those different pools of capital.
“I feel that one of the things missing is the architecture needed to match and aggregate opportunities,” he said. “When we talk about projects, we need to ask, what do investors actually require?”
That system could help develop projects at an early stage and combine smaller initiatives into larger packages that big investors can consider. It could also identify which activities need grants because they serve a public good, which need lower cost public or development funding to reduce risks, and which are ready for commercial investment.
“If governments want to issue blue bonds, they need a pipeline of investable projects,” Worby said. “That requires an architecture that can make opportunities investable, because capital ultimately needs a return.”
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There is no shortage of ocean solutions. Nor, globally, is there an absolute shortage of capital. The challenge is creating the machinery that connects public and private finance … with a pipeline of investable, scientifically sound and locally owned ocean solutions.
Kilaparti Ramakrishna, senior adviser to the president and director on ocean and climate policy, Woods Hole Oceanographic Institution
Kilaparti Ramakrishna, senior adviser to the president and director on ocean and climate policy at United States-based nonprofit Woods Hole Oceanographic Institution, made a similar case, saying governments need to better connect ocean ambition with implementation.
“There is no shortage of ocean solutions. Nor, globally, is there an absolute shortage of capital,” Ramakrishna said in the same session. “The challenge is creating the machinery that connects public and private finance, development institutions, technology and capacity building with a pipeline of investable, scientifically sound and locally owned ocean solutions.”
The comments come as the High-Level Panel for a Sustainable Ocean Economy, an intergovernmental initiative co-chaired by Norway and Palau to advance policies for ocean health and wealth, expands its focus on finance. Its current work plan calls for sustainable ocean plans, ocean accounts and innovative financing mechanisms to be integrated into investment frameworks, while a new finance working group aims to help address an estimated US$550 billion annual financing need for the transition to a sustainable ocean economy.
Blue bonds offer one illustration of the potential as Seychelles issued the world’s first sovereign blue bond in 2018, raising US$15 million for sustainable fisheries and marine conservation. The transaction was supported by a World Bank guarantee and concessional funding from the Global Environment Facility, underscoring the role of derisking and institutional capacity in attracting private investors.
“That is how we move from announcing finance to mobilising it,” Ramakrishna said, “and from promising solutions to implementing them at scale.”
