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Title page 1
Contents 6
Foreword 4
Acknowledgements 5
Abbreviations and acronyms 9
Executive summary 10
1. Blue economy trends and pressures in Southeast Asian countries 12
1.1. The blue economy is prominent in Southeast Asia, but it faces structural and transition challenges 14
1.2. Environmental degradation threatens blue ecosystems and the economic activities they sustain 18
1.3. ASEAN's regional policy response is constrained by insufficient long-term finance and investment 22
References 25
Notes 27
2. Development assistance: A crucial but constrained basis for blue economy finance 28
2.1. Development assistance is vital despite its small share of the overall finance mix 29
2.1.1. Most ASEAN countries access development finance, with lower-income countries receiving the most concessional terms 30
2.1.2. Development finance can help overcome the different barriers to blue economy finance and investment 32
2.2. Ocean-related ODA to Southeast Asia shows problematic patterns in scale, allocation and delivery 34
2.2.1. Ocean-related ODA has increased but exhibits high year-over-year volatility driven by large individual transport projects 35
2.2.2. The dominance of large individual projects creates delivery and modality challenges 37
2.2.3. ODA allocations do not consistently reflect countries' ocean and aid dependencies 39
2.3. Declining aid budgets increase the urgency of mobilising alternative capital sources 41
References 43
Notes 44
3. Diversifying blue economy finance: Opportunities and constraints across alternative sources 45
3.1. Different capital types serve distinct purposes, but their flow to ASEAN's blue economy is poorly tracked 46
3.1.1. Each capital type - international private, domestic private, and domestic public - plays a distinct role within the ASEAN Blue... 46
3.1.2. Visibility of the flows from different capital sources into the blue economy in Southeast Asia remains limited 47
3.2. Macroeconomic conditions create uneven availability of capital for the blue economy across Southeast Asia 49
3.2.1. Fiscal constraints limit domestic public finance availability 50
3.2.2. International private capital concentrates in financially developed economies 53
3.2.3. Domestic private capital availability is shaped by heterogenous financial market depth and inclusion 55
3.3. Even when available, capital may not always flow to Southeast Asia's blue economy due to policy gaps 57
3.3.1. Certain Southeast Asian countries have advanced blue economy policies whilst others are in more nascent stages - though... 58
3.3.2. Financial standards for blue economy investments and expenditures are underdeveloped 59
References 61
Note 64
4. Financing solutions: Tools and lessons learned 65
4.1. Blended finance can mitigate individual capital availability challenges but has achieved limited success 66
4.1.1. Blended finance can help de-risk blue economy investments by absorbing macroeconomic and project-level risks 66
4.1.2. Blended finance deployment in Southeast Asia shows limited scale and is concentrated across a narrow set of geographies,... 67
4.2. Innovative instruments could ease capital constraints, but adoption remains patchy in Southeast Asia 69
4.2.1. Blue debt instruments come in different forms, with blue use-of-proceed bonds being the most prominent in Southeast Asia 69
4.2.2. Debt-for-nature swaps can help ease domestic public finance constraints, but have had limited regional application 72
4.2.3. There is momentum for monetising blue ecosystem services, but blue carbon schemes are not ubiquitous in the region 74
4.2.4. Parametric insurance can de-risk blue economy investments but lacks regional precedents 76
4.3. Viability of these instruments is not guaranteed - making development support and hence additionality essential 77
4.3.1. Economic viability remains an underlying constraint 77
4.3.2. System-wide capacity needs constrain implementation 80
4.3.3. Additionality concerns require careful scrutiny 84
References 85
Notes 89
5. Synthesis of recommendations 90
5.1. National level: Build the foundation for blue economy finance 91
5.1.1. Develop clear national priorities, institutional set-up and assess financing needs 91
5.1.2. Leverage existing models, guidelines and platforms 92
5.1.3. Integrate blue economy into aid co-ordination 92
5.2. ASEAN-level: Translate regional policies to co-ordinated action 92
5.2.1. Establish a mechanism for knowledge exchange and agenda setting on blue finance 92
5.2.2. Mainstream blue economy in regional integration efforts 93
5.2.3. Explore a regional blue finance facility, learning from other regional efforts 93
5.3. Development partners: Maximise value in a constrained environment 93
5.3.1. Prioritise strategically in a challenging aid environment 94
5.3.2. Seek co-benefits across blue economy and broader sustainable development goals 94
References 95
Figure 1.1. Southeast Asia's GDP over time 13
Figure 1.2. Contribution of ocean economy to the overall economy 15
Figure 1.3. Sectoral composition of Southeast Asia and Oceania's ocean economy in 2020 16
Figure 1.4. Composition of Southeast Asia and Oceania's ocean economy, in terms of gross value added, over time 17
Figure 1.5. Southeast Asia and Oceania's share of the global ocean economy, in terms gross value added 18
Figure 1.6. Fish stock status, according to the Yale Environmental Performance Index 19
Figure 1.7. Plastic use in ASEAN countries 20
Figure 1.8. Number of climatological, geophysical, hydrological and meteorological natural disasters, 2000-2025 21
Figure 1.9. The ASEAN Blue Economy Framework 23
Figure 2.1. ODA as a share of the overall financing mix of Southeast Asian countries 29
Figure 2.2. ODA as a share of the financial inflows and tax revenues across ODA-eligible Southeast Asian countries 32
Figure 2.3. Barriers to finance and investment for the blue economy 33
Figure 2.4. Framework for measuring ocean-related ODA 34
Figure 2.5. Ocean-related ODA over time to ASEAN 35
Figure 2.6. Sectoral distribution of ocean-related ODA to ASEAN 2022-2023 36
Figure 2.7. Commitments versus disbursements 37
Figure 2.8. Share of commitments from 2010-2013 disbursed as of 2023 38
Figure 2.9. Loans and grants over time in ocean-relevant ODA 39
Figure 2.10. Ocean-related ODA versus size of EEZ and length of coastline 40
Figure 2.11. Ocean-related ODA versus share of ODA in overall financing mix 40
Figure 2.12. Early projections of DAC members ocean-related ODA to Southeast Asia 42
Figure 3.1. Different capital types mapped to the strategic pillars of the ASEAN Blue Economy Framework 46
Figure 3.2. Philanthropic contributions to SDG14 in Southeast Asia 49
Figure 3.3. Downward adjustment of Southeast Asia's economic outlook 50
Figure 3.4. Tax-to-GDP ratio across Southeast Asian countries 51
Figure 3.5. Quality of public finance management according to the PEFA indices 53
Figure 3.6. FDI flows to and stocks in Southeast Asia 54
Figure 3.7. FDI Restrictiveness Index across Southeast Asian countries 55
Figure 3.8. Availability of domestic private capital 56
Figure 3.9. Financial inclusion across Southeast Asia 57
Figure 4.1. Blended finance instruments 66
Figure 4.2. Private finance mobilised by ODA for ocean-related activities in Southeast Asia 67
Figure 4.3. Blended finance instruments for ocean-related activities in Southeast Asia 68
Figure 4.4. Blue bonds and its relation to other use-of-proceed bonds 69
Figure 4.5. Sustainable bond Issuance as Share of Total Bond Issuance in Q2 2025 71
Figure 4.6. Debt-for-nature swap architecture 72
Figure 4.7. Mean annual carbon sequestration potentials 75
Figure 4.8. The Seychelles sovereign blue bond 78
Figure 4.9. Belize blue bond transaction structure 79
Figure 4.10. The "Five Is" framework: Policy areas where donors can support GSSS bond issuances 83
Boxes 8
Box 1.1. What is the blue economy? 14
Box 2.1. Eligibility for and access to development finance 30
Box 3.1. Non-profit seeking private capital: Remittances and philanthropic contributions 47
Box 3.2. Debt sustainability and Lao PDR 52
Box 4.1. Belize debt-for-nature-swap 79
Box 4.2. What is marine spatial planning 82
Box 4.3. The "Five Is" Framework: Donor support to green, social, sustainability and sustainability-linked (GSSS) bond issuances 83
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