Blue Economy Financing for Coral Reefs
The effort to rehabilitate and sustainably utilize coral reefs across a 75,000 square kilometer area, spanning six countries—Indonesia, the Philippines, Malaysia, Papua New Guinea, Timor-Leste, and the Solomon Islands—is the primary initiative of the Coral Triangle Initiative (CTI) Regional Secretariat based in Manado. This encompasses sustainable coral reef utilization for fisheries and food security. Naturally, financing is essential to carry out these activities.
At the International Conference for Sustainable Coral Reefs held in Manado from December 13 to 15, 2024, Indonesia, which owns 65,000 square kilometers of coral reefs, presented its Blue Economy programs within the Marine Protected Areas (MPAs) framework. These include conservation and sustainable use of coral reefs. During the event, Rahmat Mulianda, Director of Maritime Affairs and Fisheries at BAPPENAS, and Tonny Wagey, Director of the Indonesia Climate Change Trust Fund (ICCTF) under BAPPENAS, discussed mobilizing funds for blue economy initiatives in Indonesia.
It was stated that the target for the Blue Economy’s contribution to Gross Domestic Product (GDP) by 2045 is 15%. In 2021, the Blue Economy accounted for only 7.6% of GDP, with government budget allocations covering merely 25% of the required funding. This indicates that an additional 75% must be sourced to achieve the 2045 target. In this context, innovative financing for the blue economy is essential.
One of Indonesia’s ongoing programs is the Ocean for Prosperity Program (known locally as Program Laut Sejahtera or LAUTRA). Targeting 15 MPAs across 11 provinces, with a proposed expansion to five additional MPAs, this initiative is implemented by the Ministry of Marine Affairs and Fisheries with support from BAPPENAS and funding from the World Bank. Conservation, preservation, rehabilitation, and sustainable use of coral reefs are integral components of LAUTRA.
Additionally, there are programs like aquaculture insurance valued at IDR 1.4 trillion, Indonesia Sustainable Sovereign Bonds worth €500 million, and sustainable sovereign bonds from Bank Rakyat Indonesia (BRI) totaling USD 500 million, with USD 55 million specifically allocated for the blue economy. Other collaborations include a Samurai Bond with Japan worth ¥104 million, a debt-for-nature swap for coral reefs with the United States valued at USD 35 million, and funds mobilized by ICCTF amounting to USD 18.3 million and IDR 328 billion, primarily in grants.
These diverse financing innovations have garnered the attention of global financial institutions eager to participate. According to Tonny Wagey, BAPPENAS is currently developing Coral Bonds and Coral Reef Insurance programs, supported by the Asian Development Bank (ADB) and the United Nations Development Programme (UNDP). Coral Bonds will target coral reefs spanning two million hectares, including five MPAs in West Papua (e.g., Raja Ampat) and East Nusa Tenggara (e.g., Alor).
The attendance of approximately 700 participants from 22 countries at the International Conference for Coral Reefs in Manado underscores the critical importance of coral reefs as marine ecosystems vital for fish habitats and spawning grounds. Observing Indonesia’s various internationally-funded programs has piqued the interest of participants from across the globe, who are eager to learn and collaborate with Indonesia, leveraging advanced technologies.
Moreover, one of the CTI Regional Secretariat’s key initiatives is utilizing coral reefs for food security. This has captured the attention of Indonesia’s Coordinating Ministry for Food Affairs, which plans to reconvene global coral reef experts in 2025 to harness marine resources for addressing food challenges, in line with President Prabowo Subianto’s food self-sufficiency agenda.The effort to rehabilitate and sustainably utilize coral reefs across a 75,000 square kilometer area, spanning six countries—Indonesia, the Philippines, Malaysia, Papua New Guinea, Timor-Leste, and the Solomon Islands—is the primary initiative of the Coral Triangle Initiative (CTI) Regional Secretariat based in Manado. This encompasses sustainable coral reef utilization for fisheries and food security. Naturally, financing is essential to carry out these activities.
At the International Conference for Sustainable Coral Reefs held in Manado from December 13 to 15, 2024, Indonesia, which owns 65,000 square kilometers of coral reefs, presented its Blue Economy programs within the Marine Protected Areas (MPAs) framework. These include conservation and sustainable use of coral reefs. During the event, Rahmat Mulianda, Director of Maritime Affairs and Fisheries at BAPPENAS, and Tonny Wagey, Director of the Indonesia Climate Change Trust Fund (ICCTF) under BAPPENAS, discussed mobilizing funds for blue economy initiatives in Indonesia.
It was stated that the target for the Blue Economy’s contribution to Gross Domestic Product (GDP) by 2045 is 15%. In 2021, the Blue Economy accounted for only 7.6% of GDP, with government budget allocations covering merely 25% of the required funding. This indicates that an additional 75% must be sourced to achieve the 2045 target. In this context, innovative financing for the blue economy is essential.
One of Indonesia’s ongoing programs is the Ocean for Prosperity Program (known locally as Program Laut Sejahtera or LAUTRA). Targeting 15 MPAs across 11 provinces, with a proposed expansion to five additional MPAs, this initiative is implemented by the Ministry of Marine Affairs and Fisheries with support from BAPPENAS and funding from the World Bank. Conservation, preservation, rehabilitation, and sustainable use of coral reefs are integral components of LAUTRA.
Additionally, there are programs like aquaculture insurance valued at IDR 1.4 trillion, Indonesia Sustainable Sovereign Bonds worth €500 million, and sustainable sovereign bonds from Bank Rakyat Indonesia (BRI) totaling USD 500 million, with USD 55 million specifically allocated for the blue economy. Other collaborations include a Samurai Bond with Japan worth ¥104 million, a debt-for-nature swap for coral reefs with the United States valued at USD 35 million, and funds mobilized by ICCTF amounting to USD 18.3 million and IDR 328 billion, primarily in grants.
These diverse financing innovations have garnered the attention of global financial institutions eager to participate. According to Tonny Wagey, BAPPENAS is currently developing Coral Bonds and Coral Reef Insurance programs, supported by the Asian Development Bank (ADB) and the United Nations Development Programme (UNDP). Coral Bonds will target coral reefs spanning two million hectares, including five MPAs in West Papua (e.g., Raja Ampat) and East Nusa Tenggara (e.g., Alor).
The attendance of approximately 700 participants from 22 countries at the International Conference for Coral Reefs in Manado underscores the critical importance of coral reefs as marine ecosystems vital for fish habitats and spawning grounds. Observing Indonesia’s various internationally-funded programs has piqued the interest of participants from across the globe, who are eager to learn and collaborate with Indonesia, leveraging advanced technologies.
Moreover, one of the CTI Regional Secretariat’s key initiatives is utilizing coral reefs for food security. This has captured the attention of Indonesia’s Coordinating Ministry for Food Affairs, which plans to reconvene global coral reef experts in 2025 to harness marine resources for addressing food challenges, in line with President Prabowo Subianto’s food self-sufficiency agenda.
