Four financing avenues TABLE 1 Credit markets Supply chains Infrastructure Insurance Credit markets are currently the most advanced financing avenue, with established carbon accounting methodologies and a growing set of projects generating revenue through the sale of blue carbon credits.Supply chain finance is emerging as a promising but fragmented channel for sustainability-linked instruments, particularly in sectors that directly interface with blue carbon ecosystems. There is significant potential for coastal infrastructure to integrate blue nature-based solutions, given their strong resilience and risk-reduction properties – but this practice has not yet been largely explored. Insurance mechanisms, though still nascent, are advancing rapidly as insurers continue to explore nature-linked insurance products and leverage the resilience benefits offered by blue carbon ecosystems. Financiers’ roles in scaling private finance TABLE 2 Deploying direct financeDirect finance involves the deployment of capital into projects or enterprises that deliver measurable blue carbon ecosystem outcomes alongside financial returns. This includes instruments such as project-level loans, equity, revenue- based financing and forward offtake agreements where performance is linked to verified blue carbon or sustainability outcomes. Direct finance transactions sit closest to the underlying assets and activities on the ground, providing the highest level of control and influence over project execution, and the most direct exposure to both risks and returns. Illustrative channels for engagement: Project finance teams within commercial banks, impact funds, private equity investors, corporate balance-sheet investors and specialized natural capital funds. Structured finance Structured finance refers to the role that financial institutions play in designing, underwriting, aggregating and distributing financial vehicles that channel capital towards blue carbon ecosystems. This includes thematic or sustainability-linked bonds, blended finance facilities, pooled project vehicles, guarantees and other mechanisms that connect concessional, public and private investors and incorporate blue carbon objectives in investments. In this role, financial institutions act as intermediaries – streamlining transaction execution, standardizing structures and packaging smaller transactions into investable products. Structured finance is essential for building investor confidence and translating small, fragmented or early-stage opportunities into channels that institutional investors can access. Illustrative channels for engagement: Investment banks, impact funds, development finance institutions, multilateral development banks and insurance-linked securities teams. Enabling finance Enabling finance encompasses both the deployment of catalytic capital and market-building actions to create the conditions for investment in blue carbon ecosystems. While building the enabling environment often relies on concessional and philanthropic funding, private financial institutions can support by providing financing for data, measurement and verification systems; supporting market infrastructure; and funding early-stage project development. Equally important are market-enabling activities, including advisory and capacity-building support to governments and developers, participation in standard-setting initiatives, and advocacy for integration of blue carbon ecosystems into sustainable finance taxonomies, ESG disclosure frameworks and credit risk models. By bridging policy, technical and financing gaps, enabling finance reduces risk, expands the investable pipeline and strengthens the market confidence needed for commercial capital to scale. Illustrative channels for engagement: Philanthropic arms of financial institutions, corporate sustainability teams, development finance institutions, foundations, family offices and early-stage catalytic capital funds. The role of small and medium-sized enterprises (SMEs) In the ASEAN region, SMEs represent more than 99% of firms and drive employment and economic growth. Although blue economy data remains limited, coastal SMEs in fisheries, aquaculture, tourism and agriculture interface directly with blue carbon ecosystems. While SMEs rarely access institutional capital directly, they are essential to the success of blue carbon financing. In particular, they are often the primary counterparties for practice change in supply chains and an increasingly important delivery partner in credit markets. Channelling finance to and through SMEs is critical to enabling durable conservation and restoration.For private financial institutions, enabling SME participation offers scale through aggregation. In practice, this means: (i) deploying direct finance that reaches SMEs through fit-for-purpose working capital and transition finance; (ii) structuring finance that aggregates SMEs into platforms, funds or other vehicles, and use guarantees or first-loss capital to de-risk cash flows; and (iii) providing enabling finance. Enabling finance funds feasibility, tenure and permitting, certification readiness, and technologies to enhance monitoring, verification and reporting – so SMEs can then qualify for more mainstream financial products. Building SME-ready transaction structures increases investability, reduces delivery risk and ensures benefits flow to the local communities most directly connected to blue carbon ecosystems. Turning the Tide: A Financier’s Guide to Investing in Blue Carbon Ecosystems 7

Turning the Tide A Financier's Guide to Investing in Blue Carbon Ecosystems 2026