Invest in Peace through Water: The Blue Peace Financing Initiative is Innovative Sustainable Finance in Action. This was the theme of a High-level Panel (HLP) organized by United Nations Capital Development Fund (UNCDF) in collaboration with the Swiss Agency for Development and Cooperation (SDC) and the Gambia River Basin Development Organization (OMVG) at the Building Bridges Week (BBW), a ground-breaking international event organized in Geneva every year since 2019 that aims to create synergies, develop new initiatives, and make finance a key catalyst for change.

Swiss public authorities, the finance community, the United Nations, and other international partners have launched the Building Bridges movement to accelerate the transition to a global economic model aligned with the SDGs. At the core of this joint initiative is the recognition that the scale and complexity of the transition require “building bridges” between multiple stakeholders in the finance, government, and international development communities.
UNCDF together with the Swiss Agency for Development and Cooperation (SDC) and the Gambia River Basin Development Organization (OMVG) have seized this unique opportunity to present the Blue Peace Financing Initiative to all relevant stakeholders: the decisions makers, the financial and investment community, and the development community.

As a reminder, the Global High-Level Panel on Water and Peace is at the heart of the Blue Peace initiative. The panel launched in 2017 its report "A Matter of Survival" with a specific recommendation on how to promote water as an instrument for cooperation and peace, including through innovative financing for water cooperation.

As a follow-up to this recommendation, the Blue Peace Financing Initiative was co-created by Basin Organizations, SDC, UNCDF as the main implementing agency and other stakeholders.

This initiative aims at promoting access to capital markets for local and regional non sovereign entities who manage water resources. It does so by using water as entry point to strengthen and create transboundary and multi-stakeholder cooperation frameworks and transform them into investment platforms through the issuance of Blue Peace Bonds.

The Blue Peace Financing Initiative opens a new and innovative market in the Sustainable Finance field, while contributing to sustainable development and peaceful societies. Therefore, this event at the 2022 edition of the Building Bridges Week was an occasion to demonstrate how water can become a connector and “bridge builder” between sectors, including public and private as well as development and finance sectors, but also between nations and communities.

The panel event was moderated by Ms. Christel Alvergne, Regional Coordinator of UNCDF in West and Central Africa, and saw relevant interventions of its speakers.

“With all the crises the world is currently experiencing, governments can't face it alone. Cooperation frameworks and negotiated agreements, especially around the natural resources are key triggers for sustainable development and this can conciliate the diversity of our political and economic interests. Mobilizing funding has always been a challenge for our countries and the OMVG as a non-sovereign entity can innovate its approach to finance for its integrated master plan which is of huge benefit to all the member states. We need to drive away poverty and we cannot do that if we don’t attain our sustainable development goals, and this is one way we can do it. The integrated master plan is very rich, it can tackle issues of agricultural deficiency. It can also tackle the use of water as a source of lifting our poverty lines. A lot more is in this, so using a financial solution to address that impact is a welcome note and we can’t wait any further.” said H.E. Ms. Rohey Johon Manjang, Minister of Environment, Climate Change and Natural Resources of The Gambia.

The HLP showcased the pioneering role of OMVG as the first River Basin Organization (RBO) to implement such an innovative financing mechanism. As a well-established RBO with a legal framework that provides the necessary authority to raise and manage funds, OMVG has proven to be ready to try new ways of financing. “We are a strong institution with a long-standing history and strong political will and support from member states, but we are still facing challenges when it comes to mobilizing funds. We thank UNCDF and SDC for accompanying us on exploring innovative financing mechanisms, including the Blue Peace Financing Initiative, to implement projects in the context of our masterplan. This is really the way forward to implement and finance development projects in a sustainable way” said OMVG High Commissioner Mr. Lansana Fofana.

Through a technical assistance process, OMVG is being supported in the development of its master and joint investment plans. This will enable OMVG to gain the institutional capacity needed to issue a financial instrument–the Blue Peace Bond–, get access to the capital market and be better positioned to absorb the financing, roll out physical infrastructure and pay back investors.

The perspective of the financial sector and potential investors is important and was highly awaited during the panel. The discussions were especially focused on the importance to mitigate risks and the solutions to explore opportunities to attract efficiently the capital market.

Climate change, unsustainable production and consumption and growing inequalities have been identified as main threats to the sustainability of all projects including water-related projects.

“So, it’s extremely important to think about how you use mainstream finance to solve some of these problems. We haven’t grasped that as a finance industry yet, but I genuinely believe that there are investment opportunities which will also generate positive outcomes for the world around us.” shared Ms. Amanda Young, Chief Sustainability Officer, arbdn

The panel also confirmed a strong market appetite for innovative regional impact investing opportunities and related financing instruments such as the Blue Peace Bond. The pipeline approach and its sectors presented (drinking water, agriculture, forestry, transport, energy, hydropower etc.) were also highly appreciated by the audience.

“This Blue Peace Financing Initiative provides amazing opportunities to give a better water management and a fair repartition of water between countries, between populations, between industries. It also gives an opportunity to aggregate in one bond: agroforestry program, hydroelectric dams, projects that are usually perceived differently and might have difficulties to find fundings and here we have an important bond and a pipeline with a lot of amazing projects that are related together in this. So, I think with the right structuring, with the right de-risking approach, this initiative could be very interesting for European investors and company like AXA for instance” expressed Ms. Ariane Kaploun, Head of Nature-Based Initiatives, AXA Climate.

The HLP was a successful event. Speakers agreed that the Blue Peace Financing Initiative will provide a new financial incentive for countries and sectors to cooperate and establish political agreements on the sustainable management of shared resources, reducing social, political, economic, and environmental risks and conflicts. Meanwhile, it will change the financial sector’s perception of water, not as a distinct sector, but as an entry-point for multisectoral and regional impact investment opportunity.

Hence, investing in Blue Peace supports the achievement of the 2030 and Addis Ababa Agendas while also transforming water from a potential source of conflict into an instrument of cooperation and peace. So “If you are looking for a great investment opportunity, here it is: the Blue Peace Financing Initiative” closed H.E. Mr. Christian Frutiger, Vice-Director General and Head of Thematic Cooperation, Swiss Agency for Development and Cooperation (SDC).