The blue bond market, a subset of green debt where the use of proceeds is earmarked for water and ocean-related projects, grew 10% year-on-year in 2024. Yet, it still only represents around 0.25% of the global sustainable bond market, according to estimates by Markus Müller, Deutsche Bank’s chief investment officer sustainability.
Water is a huge problem for the next decades, and instruments like blue bonds help us to direct much more financing towards this type of asset
The potential, however, lies in market sizing: water-related investment needs are as vast as the ocean. In utilities alone, research estimates point to US$20 trillion needed by 2050 for water management. The estimated cumulative funding gap for marine conservation, research and sustainable development remains alarmingly vast, with at least US$900 billion needed between now and 2030, according to studies.
“Water is a huge problem for the next decades, and instruments like blue bonds help us to direct much more financing towards this type of asset in a way that can be monitored and that can be standardised,” says Alfonso Garcia Mora, vice-president for Europe, Latin America and the Caribbean of the International Finance Corporation (IFC).
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