Financing Southeast Asia's Blue Economy

5. Synthesis of recommendations

Abstract

The preceding analysis reveals a challenging financing landscape for Southeast Asia's blue economy. Official development assistance faces declining trajectories, among other limitations. Macroeconomic conditions and policy gaps constrain access to alternative capital. While blended finance and innovative instruments offer potential pathways, each requires enabling conditions many countries lack. This suggests that no single capital source can bridge the USD 2.1 trillion financing gap through 2030. Success instead depends on co-ordinated action across three levels: national governments building foundational conditions for blue finance; the Association of Southeast Asian Nations (ASEAN) translating regional commitments into co-ordinated action; and development partners maximising the value of scarce concessional resources. This chapter synthesises key findings into actionable recommendations for each actor.

The preceding chapters have documented three interconnected realities that shape Southeast Asia's blue economy financing landscape – each with implications for how the region can mobilise the USD 2.1 trillion needed by 2030.

First, substantial heterogeneity exists across ASEAN member states in macroeconomic conditions, institutional capacity and ocean dependency. This variation means national contexts fundamentally impact what financing strategies are viable. Yet as a regional institution with an explicit mandate to narrow development gaps, ASEAN has a distinctive role – particularly because the Blue Economy Framework has established a regional benchmark that member states have collectively endorsed.

Second, underlying enabling conditions influence whether capital flows to blue economy priorities. The emergence of innovative financing instruments – blue bonds, debt-for-nature swaps, blue carbon markets, parametric insurance – represents meaningful progress. However, the analysis shows these mechanisms depend on macroeconomic stability, policy frameworks and institutional capacity that they do not inherently create. Without addressing these fundamentals, even sophisticated instruments fail to mobilise capital effectively.

Third, development finance remains operationally necessary even as strategic diversification becomes imperative. Declining official development assistance (ODA) budgets and the broader development trajectory both create pressure to reduce reliance on development assistance. Yet the evidence reveals that pathways to financial autonomy frequently require development support as their foundation – whether through credit enhancement, capacity building or de-risking interventions. The challenge is therefore how to deploy ODA more effectively, i.e. directly funding activities that markets systematically undervalue while simultaneously strengthening the conditions that enable broader resource mobilisation.

These findings generate distinct but complementary recommendations for three stakeholder groups: national governments (reflecting country-level heterogeneity), ASEAN as a regional institution (given its co-ordination and harmonisation functions) and development partners (recognising development co-operation’s continued role in addressing resource constraints and building enabling conditions).

5.1. National level: Build the foundation for blue economy finance

5.1.1. Develop clear national priorities, institutional set-up and assess financing needs

Effective capital mobilisation begins with sound policy and institutional architecture. For countries still developing blue economy frameworks, this represents the foundational step. Where countries opt for standalone blue economy strategies, integration with existing planning instruments – development plans, nationally determined contributions, sectoral strategies – determines whether priorities translate into budgetary allocations and implementation rather than remaining aspirational.

Once policy frameworks are established, countries need to quantify financing needs across priority areas to enable targeted resource mobilisation. Implementing monitoring mechanisms such as blue budget tagging allows tracking of expenditure against stated commitments. Developing effective financing strategies requires mapping different capital sources to specific needs based on their respective functions and constraints – recognising that domestic public finance, international private capital and domestic private capital serve distinct purposes and face different deployment barriers.

A critical dimension of financing strategy development is assessing whether existing mechanisms can meet identified needs before pursuing new instruments. Given the imperative to demonstrate additionality – that new instruments mobilise resources beyond what alternatives would achieve – established financing pathways often prove more efficient than complex innovations that generate substantial transaction costs without commensurate resource mobilisation. This assessment criterion helps ensure that instrument selection serves strategic objectives rather than innovation for its own sake.

5.1.2. Leverage existing models, guidelines and platforms

Countries need not develop approaches from scratch. Regional experience provides actionable models: Indonesia has established detailed blue economy policy frameworks, blue budgeting processes and operational experience with multiple instruments including outcome-based bonds, bilateral debt-for-nature swaps and blue carbon mechanisms.

International tools offer structured methodologies. The World Bank's Blue Public Expenditure Review provides an analytical framework for assessing current spending patterns and identifying inefficiencies (World Bank, 2021[1]). The United Nations Development Programme’s Biodiversity Finance Initiative supports evidence-based finance planning through systematic assessment of expenditures, needs and solutions (UNDP, 2025[2]). For specific instruments, the International Capital Market Association and Asian Development Bank have developed standardised guidance for blue bond issuance that enhances investor confidence while reducing transaction costs (ADB, 2023[3]).

International knowledge exchange platforms complement these technical resources by facilitating peer learning across countries. In addition to ASEAN-specific platforms, there exists a range of initiatives relevant to different ASEAN member states that function as spaces where policymakers can compare approaches, identify good practices and adapt lessons to national contexts. Some examples include the Commonwealth Blue Charter (The Commonwealth, 2026[4]), for Southeast Asian countries who are members of the Commonwealth, the Sustainable Ocean Initiative, for parties of the Convention on Biodiversity (CBD, 2025[5]), and the Coral Triangle Initiative (Coral Triangle Initiative, 2026[6]) – for Coral Triangle countries.

5.1.3. Integrate blue economy into aid co-ordination

For aid-reliant countries in Southeast Asia, development assistance remains necessary even as diversification becomes imperative. Integrating blue economy priorities into aid co-ordination mechanisms is essential. Development finance can fund public goods that markets undervalue, provide technical assistance that strengthens institutions, and supply credit enhancements that make innovative instruments viable. Systematic aid co-ordination enables countries to determine the appropriate support modality for specific needs: direct project funding, sectoral budget support or assistance establishing financing mechanisms such as blue bonds or blended finance structures.

Effective integration requires cross-ministerial engagement to ensure blue economy priorities receive consideration in donor programming alongside competing sectoral demands, rather than operating as isolated initiatives unable to access the development support necessary for building long-term financing capacity.

5.2. ASEAN-level: Translate regional policies to co-ordinated action

5.2.1. Establish a mechanism for knowledge exchange and agenda setting on blue finance

In the short term, ASEAN is encouraged to prioritise knowledge exchange and peer learning between member states. Establishing an ASEAN Blue Finance Working Group as a subset of the ASEAN Co-ordinating Taskforce for the Blue Economy would facilitate regular, focused discussions on the technical aspects of blue economy finance.

Critically, these meetings require cross-ministerial representation – bringing together officials from finance ministries, environment ministries and economic planning agencies – because blue economy finance sits at the intersection of fiscal policy, environmental management and sectoral line ministries. Establishing national-level co-ordinating bodies on blue finance would facilitate this, with focal points from these bodies representing their countries in the regional working group.

Beyond knowledge sharing, the working group would set the agenda for longer-term regional blue finance priorities and co-ordinate blue finance actions. This may, for instance, entail developing common monitoring, reporting and verification frameworks – alongside impact measurement standards – for blue finance instruments.

5.2.2. Mainstream blue economy in regional integration efforts

ASEAN's regional financial architecture offers multiple entry points for integrating blue economy priorities.

The ASEAN Taxonomy Group could explicitly incorporate blue economy criteria. This would standardise definitions across member states and ensure blue investments are recognised within regional sustainability frameworks. Similarly, the Regional Investment Promotion Action Plan, which co-ordinates investment promotion to position ASEAN as a unified destination, could be leveraged to showcase bankable blue economy projects and reduce transaction costs for investors seeking marine and coastal opportunities.

Recent capital market initiatives suggest growing scope for alignment. The ASEAN Capital Markets Forum Action Plan 2026–2030 commits to scaling up financing for clean energy, resilient infrastructure and climate projects through increased adoption of the ASEAN Taxonomy and Transition Finance Guidance (ASEAN Capital Markets Forum, 2025[7]). Whilst not blue economy-specific, these instruments provide technical foundations that could channel capital toward sustainable blue sectors. Corporate accountability mechanisms also present opportunities: planned enhancements to the ASEAN Corporate Governance Scorecard would elevate sustainability performance indicators (ASEAN Capital Markets Forum, 2017[8]), whilst the ASEAN Simplified Environmental, Social and Governance (ESG) Disclosure Guide (ASEAN Capital Markets Forum, 2025[9]) aims to help small and medium-sized enterprises demonstrate credible ESG performance and access capital markets.

These examples are illustrative rather than exhaustive, but they demonstrate that mainstreaming blue economy finance does not require wholesale institutional redesign. It requires deliberate alignment of existing regional tools with blue economy objectives.

5.2.3. Explore a regional blue finance facility, learning from other regional efforts

In the medium to long term, ASEAN could consider establishing a regional blue finance facility, drawing on global models such as Europe's BlueInvest initiative (European Commission, n.d.[10]) and the emerging Unlocking Blue Pacific Prosperity (Pacific Community, 2024[11]). However, any such facility should leverage existing regional architecture rather than duplicating it. The Asian Development Bank's Healthy Ocean Action Plan, for instance, already operates the Blue Southeast Asia Finance Hub (ADB, n.d.[12]). Hence, engagement and collaboration with the Asian Development Bank (ADB), in a similar vein to the ASEAN Infrastructure Fund (administered with the ADB), would be fitting (ADB, n.d.[13]).

Key design elements for a regional facility could include: 1) ensuring value beyond the national level through resource pooling and leverage; 2) supporting both supply (capital availability) and demand (project preparation and technical assistance); and 3) establishing mechanisms to accommodate different project sizes, from community-based coastal management initiatives to large transboundary infrastructure investments.

5.3. Development partners: Maximise value in a constrained environment

The OECD's guidance on development co-operation for a sustainable ocean economy provides a global framework for the application of development finance in supporting partner countries (OECD, 2025[14]). It emphasises the need for an integrated approach – promoting four goals concurrently (economic development and resilience, equity, climate action and healthy ecosystems). It calls for improving the delivery and use of ODA, leveraging partnerships to unlock capital from multiple sources and directing support to specific mechanisms bearing in mind their use cases and challenges. This guidance applies generally to Southeast Asia.

Within this broader framework, and in the context of Southeast Asia, two priorities emerge as particularly critical given current constraints on development assistance.

5.3.1. Prioritise strategically in a challenging aid environment

With ODA projected to decline significantly in coming years, development partners face difficult prioritisation decisions. For Southeast Asia's blue economy, this means:

• Channelling direct funding where markets systematically undervalue impact: Concessional resources can be concentrated on marine conservation, blue economy policy development, institutional capacity building and other public goods that private capital will typically not finance. These investments can even generate broader enabling environment improvements that unlock capital through enhanced governance, clearer property rights and stronger regulatory frameworks. For instance, support for marine spatial planning or ocean accounting can create the information infrastructure that catalyses subsequent private investment.

• Using guarantees and blended finance strategically and with development impact in mind: Available guarantees and risk-sharing instruments can be deployed strategically to enable countries to access other sources of capital, particularly for commercially viable blue economy projects that face excessive risk premiums due to weak enabling environments. The European Fund for Sustainable Development Plus is one example of this approach. However, the core principles of effective blended finance – prioritising development impact and public value, focusing on mobilising commercial finance, tailoring efforts to the local context, strengthening partnerships and monitoring for transparency and results – all apply.

• Supporting the establishment of blue finance instruments when aligned with country priorities and demonstrating clear additionality: Blue finance instruments can form part of the broader financing solution for Southeast Asia's blue economy. While they may represent a pathway towards financial autonomy, they often remain contingent on development partner support. Channelling development assistance towards these instruments may be justified in certain contexts, but this requires clear alignment with recipient countries' priorities and needs, as well as demonstrable additionality beyond what traditional instruments can achieve.

5.3.2. Seek co-benefits across blue economy and broader sustainable development goals

Effectiveness in a resource-constrained environment requires strategic integration at project and policy levels. Development partners can actively pursue co-benefits across ocean health, climate, biodiversity and development objectives. While these are often treated as separate issue areas with distinct financing streams and institutional mandates, they are fundamentally interconnected. Climate finance can support blue carbon ecosystems like mangroves and seagrass beds that simultaneously sequester carbon, protect coastlines from storms and provide nursery habitat for commercially important fish species. Biodiversity finance can strengthen coastal resilience and support livelihoods of fishing communities. Blue economy investments can advance multiple Sustainable Development Goals (SDG) simultaneously – SDG 14 on oceans, SDG 13 on climate, SDG 1 on poverty and SDG 8 on economic growth.

This integrated approach maximises the impact of scarce resources by designing interventions that generate multiple benefits rather than optimising for single objectives.

References

[3] ADB (2023), Bonds to Finance the Sustainable Blue Economy: A Practitioner’s Guide, Asian Development Bank, Manila, https://www.adb.org/publications/bonds-finance-sustainable-blue-economy-practitioners-guide.

[13] ADB (n.d.), ASEAN Infrastructure Fund, https://www.adb.org/what-we-do/funds/asean-infrastructure-fund.

[12] ADB (n.d.), Blue SEA Finance Hub, https://www.adb.org/what-we-do/themes/environment/bluesea.

[7] ASEAN Capital Markets Forum (2025), ACMF Action Plan 2026-2030, https://www.sc.com.my/api/documentms/download.ashx?id=084b473a-84f3-4af5-918b-9c99cd09f3fa.

[9] ASEAN Capital Markets Forum (2025), ASEAN Simplified ESG Disclosure Guide Version 1, https://www.theacmf.org/initiatives/sustainable-finance/asean-simplified-esg-disclosure-guide-version-1.

[8] ASEAN Capital Markets Forum (2017), The ASEAN Corporate Governance Scorecard, https://www.theacmf.org/initiatives/corporate-governance/the-asean-corporate-governance-scorecard.

[5] CBD (2025), Sustainable Ocean Initiative, https://www.cbd.int/soi/.

[6] Coral Triangle Initiative (2026), Frequently Asked Questions, https://www.coraltriangleinitiative.org/frequently-asked-questions-0.

[10] European Commission (n.d.), BlueInvest, https://maritime-forum.ec.europa.eu/theme/investments/blueinvest_en.

[14] OECD (2025), Promoting Sustainable Ocean Economies: Guidance for Development Co-operation, Best Practices in Development Co-operation, OECD Publishing, Paris, https://doi.org/10.1787/72055d7f-en.

[11] Pacific Community (2024), Unlocking Blue Pacific Prosperity: Co-designing our Future for Resilient Ecosystems, Robust Food Systems and Thriving People, https://spccfpstore1.blob.core.windows.net/digitallibrary-docs/files/68/687f76b4074847552719d0344e47b741.pdf?sv=2015-12-11&sr=b&sig=p9JfD%2BYutUKnVbKSZ%2BkxVnL8jj1xJEp3cPqe%2F7ZNbfA%3D&se=2026-08-19T20%3A58%3A49Z&sp=r&rscc=public%2C%20max-age%3D864000%2C%.

[4] The Commonwealth (2026), Commonwealth Blue Charter, https://thecommonwealth.org/bluecharter.

[2] UNDP (2025), Biodiversity Finance Initiative, https://www.biofin.org/.

[1] World Bank (2021), Blue Public Expenditure Review Guidance Note, https://documents1.worldbank.org/curated/en/789491639977748921/pdf/Blue-Public-Expenditure-Review-Guidance-Note.pdf.