Whether you are working out your weekly spending plan, or managing a national budget, it’s likely that you wish for a little more money to go around. Unfortunately, money doesn’t grow on trees, and so, when planning for sustainable development, governments have to examine tired budgets and stretched resources to “find financing” for projects. But for development to continue, although difficult, it is necessary to secure additional financing for potential growth engines like the Blue or Ocean-based Economy. 

As part of UNDP’s work with government partners to find solutions, the Harnessing Blue Economy Finance for SIDS Recovery and Sustainable Development (Blue Finance) Joint Programme conducted Development Finance Assessment (DFA) in Barbados, Grenada, and St Vincent and the Grenadines, to help “find” the ever-elusive financing. DFA reports are structured to inform an integrated approach to financing national development by combining a review of all public and private financial flows in the economy into a single Integrated National Financing Framework (INFF)^[1] to support attainment of Sustainable Development Goals (SDGs) and national priorities.

By examining all the varied financing channels within the countries, a DFA provides insights on possible ways to “find” or create additional funding that can be allocated to supporting priority areas or thematic windows like the Blue Economy. So, did the DFA find any Blue Financing solutions? Let’s look and see!

Follow the Funds

Public budgets are generally under pressure and offer little opportunity for further financing, but if we look to their cousin, the private sector, there may be more opportunities. The DFAs found that in all 3 countries, the private sector plays a critical role for funding blue growth, however it was also noted that it was important to create conducive national enabling environments and incentives to promote Private Sector participation, before being able to tap into this resource. For example, in Barbados, the private sector there is high excess liquidity in the banking system which provides opportunity for funding, the Private sector also have increased capacity and skillset to deliver national Blue-Green projects. However, before this can occur Government will have to develop policies to effectively mobilise this potential private sector participation focussing on the MSME sector which represents 67% of the private sector as well as large enterprises. These two groups will need targeted policy and incentives to implement Blue projects.

Put the best “proposal” forward 

While national financing maybe stretched, several donors and international partners have made available funding for Blue projects, however access to these resources can be very time consuming and convoluted at times. To ensure the best chance of being selected to receive this type of funding it is important to mobilise technical assistance facilities to support BGE project design and preparation now and boost local capacity for future projects. Ensuring the necessary support is provided and national capacities are built is one of the critical roles the international community, including UNDP, can play in this space.

Tap into the potential of Public-Private Partnerships (for large-scale projects) and NGOs (for smaller-scale projects)

Public sector will not be able to singlehandedly finance the necessary investment needed to develop the Blue Economy and will therefore need to collaborate with the private sector. Public-private partnerships can be a powerful tool to support such transition, however, the necessary policy and legal environment will need to be in place to ensure clear, predictable, and legitimate regulations supported by competent and well-resourced authorities. Grounding the selection of PPPs in value for money and using the budget process transparently to minimize fiscal risks and ensure the integrity of the procurement process are also critical steps to be taken for PPP delivery.

NGO delivery capacity and national oversight is currently not sufficient for the delivery of a Blue Economy at scale. Mobilising greater volumes of financial support and/ or public funds for NGOs to deliver blue projects will require that NGOs develop accountable management capacities. Establishing managerial capacities of NGOs alongside regular national oversight of their performance will be essential where BGE project funding includes wages, materials, and operating cost.

The Blue Economy is a key player in promoting sustainable growth in the Caribbean and has the potential to promote social inclusion due to its diversity. Finding finance for the blue or any other important development initiative will always be a challenge, but with tools like the DFA and the support of developmental partners, the Caribbean can find both innovative and traditional ways to finance the blue!