SEC readies rules, lists projects for blue finance

THE Securities and Exchange Commission (SEC) has provided a list of projects that are eligible for “blue” finance, including wastewater management and offshore renewable energy, under draft guidelines that it asked would-be issuers to comment on before month’s end.

In an advisory, it said the guidelines “are intended as a reference on eligible blue projects and activities which blue bonds can finance.” The raised funds are meant to support the sustainability and conservation of ocean-based resources.

The SEC has enumerated six eligible activities, namely water supply; water sanitation; ocean-friendly and water-friendly products; ocean-friendly chemicals and plastic-related sectors; sustainable shipping and port logistics sectors; and fisheries, aquaculture, and seafood value chain.

Eligible blue project categories include ecosystem management and natural resources restoration of coastal, marine, and river ecosystems;  sustainable fisheries management; sustainable tourism in the vicinity of marine conservation areas; wastewater management; and marine and offshore renewable energy.

Under the proposed guidelines, eligible issuers must provide the clear benefits to ocean health that their project or activities can supply.

Issuers must also contribute to the United Nations (UN) Sustainable Development Goals (SDG) no. 6 and/or 14, which they need to assess and quantify, where feasible.

UN SDG nos. 6 and 14 pertain to the goal of availability and sustainable management of water and sanitation, and the conservation and sustainability of oceans, seas, and marine resources. Eligible blue activities must contribute to the two goals.

Additionally, the commission said that the issuer must prepare a framework that clearly distinguishes the use of proceeds toward green, social, and blue activities.

According to the SEC eligible blue projects must aim to address sustainable water management and ocean protection, and must also seek to contribute to the development of the “blue economy.”

Meanwhile, harmful activities such as fossil fuel power generation are ineligible for blue bond issuance, as well as projects that pose significant harm to ocean health and resources.

“Issuers are also encouraged to develop a list of additional ineligible projects and/or activities for the issuance of their blue Bonds,” the SEC said.

The proposed blue bond guidelines are applied in conjunction with SEC Memorandum Circular No. 12 of 2018 or the “Guidelines for the Issuance of ASEAN Green Bonds Under the ASEAN Green Bonds Standards in the Philippines.” — Adrian H. Halili