Foreword  3

Acknowledgements  4

Abbreviations and acronyms  8

Executive summary  9

1 Blue economy trends and pressures in Southeast Asian countries  11

1.1. The blue economy is prominent in Southeast Asia, but it faces structural and transition challenges  13

1.2. Environmental degradation threatens blue ecosystems and the economic activities they sustain  17

1.3. ASEAN's regional policy response is constrained by insufficient long-term finance and investment  21

References  24

Notes  26

2 Development assistance: A crucial but constrained basis for blue economy finance  27

2.1. Development assistance is vital despite its small share of the overall finance mix  28

2.2. Ocean-related ODA to Southeast Asia shows problematic patterns in scale, allocation and delivery  33

2.3. Declining aid budgets increase the urgency of mobilising alternative capital sources  40

References  42

Notes  43

3 Diversifying blue economy finance: Opportunities and constraints across alternative sources  44

3.1. Different capital types serve distinct purposes, but their flow to ASEAN's blue economy is poorly tracked  45

3.2. Macroeconomic conditions create uneven availability of capital for the blue economy across Southeast Asia  48

3.3. Even when available, capital may not always flow to Southeast Asia's blue economy due to policy gaps  56

References  60

Note  63

4 Financing solutions: Tools and lessons learned  64

4.1. Blended finance can mitigate individual capital availability challenges but has achieved limited success  65

4.2. Innovative instruments could ease capital constraints, but adoption remains patchy in Southeast Asia  68

4.3. Viability of these instruments is not guaranteed – making development support and hence additionality essential  76

References  84

Notes  88

5 Synthesis of recommendations  89

5.1. National level: Build the foundation for blue economy finance  90

5.2. ASEAN-level: Translate regional policies to co-ordinated action  91

5.3. Development partners: Maximise value in a constrained environment  92

References  94