Investors eyeing Blue Economy projects should not expect quick returns as investments will be based on sustainability for the future.
CFA Institute, a global nonprofit member organization of financial analysts, portfolio managers, and other investment professionals says that much like green projects, investors will have to take into account the question of sustainability and ESG-Environmental Social Governance over fast high value returns.
“It’s not a quick high return chase,” CFA Society EA board director Nicholas Malaki said. “They should be willing to get a small cut on returns, but through this support, value will be created for a longer term.”
He said pension funds would make for good investors in Blue Economy projects due to their large capacity and long-term tenure. Although Kenya is turning its focus on the exploitation and conservation of the blue economy, investor sentiment may be lower for related projects due to the aspect of lower returns and the long tenure required to reap benefits from these projects.
“There has to be a deliberate effort to incentivize these projects so that investors can participate in these kinds of activities,” Malaki said.
Some of these incentives could be provided through the establishment of Marine Protected Areas and Exclusive Economic Zones-a sea zone over which a state has special rights regarding the exploration and use of marine resources, including energy production from water and wind.
The Blue economy involves the sustainable use of oceans, seas, lakes, rivers and coasts to spur economic growth and preserve the health of the aquatic ecosystem.
Speaking yesterday at the global forum for Governors and Mayors, which was held on the sidelines of the ongoing Sustainable Blue Economy Conference, President Uhuru Kenyatta urged investors to engage with counties on projects under the blue economy sector and explore ways to collaborate.
He said Kenya has several towns along the coast, lakes and rivers, including two of the countries big cities, adding that Mombasa and Kisumu, in particular, offer investment opportunities in renewable energy, tourism, fish processing and storage and maritime transport.
“The National government and our counties have put together a portfolio of bankable investment projects of almost $1.4 billion in these areas,” Uhuru said.