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Blended finance is a term we hear being used in the context of conservation funding. It is well-known that finance from governments will not be sufficient to achieve the sustainable development goals and therefore, there is a need to mobilise other sources of financing for development by attracting commercial investors. Blended finance is a catch-all for forms of financing that leverage development funds to create a more investment-friendly environment for private sector capital to invest.

When the private sector looks at investment opportunities it assesses its interest in those opportunities against its risk appetite.  Often, especially in the budding conservation finance space where there is still little track record, the risks are seen to be quite high.  In order to reduce those risks, development funds from a wide variety of sources such as multilateral financing institutions or development banks can be used in a variety of different ways (for example: guarantees, risk insurances and committed technical assistance) to make the investment opportunity more investor-friendly.  In essence, those providing the development finance remove a significant enough portion of the risk from the balance sheet of the investor to make that investor comfortable to proceed.

Source: Convergence – Blended Finance https://www.convergence.finance/blended-finance#philanthropic-investors

Confidence is further increased if there is a local presence such as a fund manager that can help build local capacity and understand risks and opportunities attached to each investment. Seychelles’ Conservation and Climate Adaptation Trust (SeyCCAT) is one such fund manager. It is capitalized by the proceeds of blended finance through two innovative financing instruments:

  • Debt-for-nature Swap: – The Government of Seychelles engaged in a debt-for-nature buy-back from its external creditors. They included the governments of Belgium, France, Italy, the Republic of South Africa, and the United Kingdom of Great Britain and Northern Ireland. The debt was bought back with approximately $21.6 million mobilised by The Nature Conservancy (TNC). TNC is a US-based non-governmental organisation. This transaction means a portion of Seychelles’ debt repayments to TNC will now fund innovative marine protection and climate adaptation projects. The debt-swap was made possible by private funders, including the Leonardo DiCaprio Foundation, Oak Foundation, Oceans 5, and Waitt Foundation, among others. Other collaborators on the initiative include, United Nations Development Programme, Global Environment Facility, and Global Island Partnership.


  • Seychelles’ Blue Bond: The Government of Seychelles issued a sovereign bond, which raised $ 15 million from international investors including three investors: Calvert Impact Capital, Nuveen, and U.S. Headquartered Prudential Financial Inc. The World Bank assisted in developing the blue bond designed to support sustainable marine and fisheries management. The World Bank provided a US$5 million guarantee and the Global Environment Facility supported with a US$ 5 million concessional loan that will assist with interest repayment on the bond.

SeyCCAT is tasked with managing the proceeds of the debt-swap and $ 3 million of the $15 million of the blue bond proceeds.

Now, because blended finance comprises sources of funding that are a mixture of both governmental (or multi-governmental) and private sector sources, it is imperative that the management or governance team of that investment broadly represents the multi-faceted nature of the incoming investment.

Typically, as is the case here at SeyCCAT, there is a Board responsible for overseeing the smooth-running of operations.  Two considerations are vitally important in the composition of that Board.  It must be multi-stakeholder – in order to reflect the variety of funding sources and leverage the unique skills of the most suitable public and private organizations out there to help it to deliver on its promises – and also non-governmental in majority – in order to ensure the amount of funds needed are achieved.

These considerations were very important to the design of SeyCCAT.  The SeyCCAT Board of Trustees is comprised of 9 members with representation from across the government and non-government sectors.  They include Minister of Environment, Energy and Climate Change Minister of Finance, Trade, Investment and Economy, Principal Secretary responsible for fisheries, representative of The Nature Conservancy, Chairperson for Seychelles Chamber of Commerce and Industry, Chief Executive Officer, Island Development Company, Chief Executive Officer, Citizens Engagements’ Platform Seychelles, representative of Seychelles Hospitality and Tourism Association and a representative of the Fishers’ and Boatowners’ Association.

An additional consideration important to our context is also the need to ensure the ability of government ministries to apply for funding for conservation projects.  For example, it may be the case that the Department responsible for fisheries has a specific sustainable development project in mind and it wishes to apply for funding from SeyCCAT to realize that project.  If SeyCCAT had a government majority it would not be able to make any such application. The independent SeyCCAT structure is not unique with similar arrangements in other countries in particular, Latin America and the Caribbean.

SeyCCAT strives to increase the availability of financing for the development of the Seychelles’ blue economy.



Key Takeaways

  • Blended finance a catch-all for forms of financing that leverage development funds to create a more investment-friendly environment for private sector.
  • SeyCCAT is funded with blended finance proceeds.
  • The most appropriate governance structure in a blended finance investment is wide representation and non-governmental majority.

SeyCCAT Snapshot

  • SeyCCAT manages the US$ 21.6 million debt-swap and US$ 3 million of the Seychelles’ sovereign blue bond.
  • SeyCCAT’s Board includes a wide representation with 6 of the 9 Board members are from private sector and civil society.
  • SeyCCAT’s grant financing is occasionally leveraged to attract more private sector finance from other partners and donors who are willing to match funds provided by SeyCCAT.