OA and Multilateral Development Finance

1. Outcome

After reading this Circular, finance ministry officials and project developers will be able to use Ocean Accounts data to build stronger business cases for multilateral development finance--quantifying ocean-based development opportunities, natural capital benefits, and alignment with MDB safeguard requirements. The guidance shows how national statistical offices, ocean management agencies, and finance ministries can leverage structured accounting data to strengthen project proposals and programme documentation for submission to multilateral development banks (MDBs) and international climate and biodiversity funds.

Readers will learn how to connect ocean accounting information to MDB project appraisal requirements, understand the role of natural capital valuation in cost-benefit analysis for development finance, and align ocean account reporting with emerging international frameworks for nature-related financial disclosure. The guidance supports practitioners in articulating the economic rationale for ocean investments using internationally standardised accounting information that is recognised by development finance institutions. By grounding project proposals in the structured data of Ocean Accounts, practitioners can strengthen the evidence base for sustainable ocean development, demonstrate alignment with environmental and social safeguards, and improve the monitoring and evaluation of financed activities.

Key decision contexts supported by this guidance include: MDB project appraisal using ocean accounting baselines, blue bond verification and impact reporting, Small Island Developing States (SIDS) ocean finance tracking for SDG 14.7 implementation, and Green Climate Fund and Global Environment Facility results frameworks that require quantified natural capital metrics. The structured information from Ocean Accounts provides the common baseline across these diverse financing contexts, enabling consistent measurement of ocean dependencies, environmental outcomes, and financial risks related to nature loss. In this way, Ocean Accounts function as a data pipeline to capital -- converting structured environmental-economic information into the standardised evidence base that investors, development finance institutions, and sovereign borrowers require to originate, appraise, and monitor ocean-related financial instruments.

This Circular builds on the foundational concepts and terminology introduced in TG-0.1 General Introduction to Ocean Accounts and the statistical standards described in TG-0.2 Overview of Relevant Statistical Standards. The guidance provided here supports downstream application at the project level (TG-1.8 OA and Project-Level Finance), detailed valuation methods (TG-1.9 Safe Usage of Monetary Valuation), and investment indicator compilation (TG-2.6 Ocean-related Investment).

2. Requirements

Essential prerequisites:

• TG-0.1 General Introduction to Ocean Accounts -- for the foundational understanding of Ocean Accounts structure, including the distinction between stocks and flows, the relationship to the System of National Accounts (SNA) and System of Environmental-Economic Accounting (SEEA), and the multiple-capitals framework for wellbeing and sustainability
• TG-0.2 Overview of Relevant Statistical Standards -- for background on the relationship between SNA and SEEA frameworks that underpins the multilateral finance application

Helpful background:

• TG-1.8 OA and Project-Level Finance -- detailed guidance on applying Ocean Accounts at the individual project scale, including project-specific cost-benefit analysis and results monitoring
• TG-1.9 Safe Usage of Monetary Valuation -- comprehensive guidance on valuation methods for ocean ecosystem services and assets, including discount rate selection and welfare value estimation
• TG-2.6 Ocean-related Investment -- methodological guidance on compiling ocean-related investment indicators, including gross fixed capital formation and sustainable finance instruments

3. Guidance Material

3.1 Ocean accounts and multilateral development finance

Multilateral development banks (MDBs) collectively provide hundreds of billions of dollars in development financing annually, with increasing attention to climate adaptation, biodiversity conservation, and sustainable blue economy development^[1]. The principal MDBs include the World Bank Group, Asian Development Bank, African Development Bank, Inter-American Development Bank, European Bank for Reconstruction and Development, and Asian Infrastructure Investment Bank. Vertical climate and biodiversity funds, including the Green Climate Fund (GCF) and Global Environment Facility (GEF), provide additional financing channels with specific environmental mandates. The distinction between MDBs and vertical funds matters in practice because their appraisal processes differ: MDBs typically apply economic rate-of-return tests and safeguard compliance frameworks, whereas vertical funds such as the GCF and GEF employ investment criteria centred on paradigm-shift potential, climate rationale, or global environmental benefits. Practitioners should tailor their use of ocean accounting data to the specific requirements of the financing institution being approached.

The 2025 System of National Accounts (SNA) introduces new guidance on sustainability measurement that directly supports the use of accounting frameworks in development finance contexts. Chapter 35 of the 2025 SNA explains that accounting-based approaches that bring together information in a structured way and cover multiple capitals "provide an excellent structure for the required baseline information" for assessments of sustainability, capacity, resilience and risk^[2]. The SNA further notes that "the use of a common baseline across different assessments can enhance the usefulness of assessments for decision makers since the differences across assessments can be more readily compared"^[3].

For development finance purposes, Ocean Accounts can provide this common baseline by organising data on:

• The stocks and condition of marine and coastal natural capital assets
• The flows of ecosystem services from ocean environments
• The economic contribution of ocean-related sectors to national production
• The dependencies of coastal communities and ocean industries on ecosystem services
• The physical and monetary dimensions of environmental pressures and responses

This structured information addresses core elements of MDB project appraisal: the economic rationale for investment, the baseline against which results will be measured, the environmental and social context in which projects operate, and the sustainability of anticipated benefits over time.

The 2025 SNA also introduces guidance on accounting for areas beyond national jurisdiction (ABNJ), noting that where there is interest in organising data about natural capital outside the scope of the national accounts, "the accounting definitions and treatments of the integrated framework of the SNA and the SEEA can be applied"^[4]. This is particularly relevant for ocean financing that spans exclusive economic zones and high seas areas.

Downward connections to accounts, indicators and data

Ocean Accounts provide the downward connections that translate development finance commitments into measurable outcomes. The structured data from Ocean Accounts supports four key operational functions for multilateral development finance:

Baseline establishment for project appraisal: In the Ocean Accounts Framework (TG-0.1), the valuation of ecosystem services flowing to the economy corresponds to Edge E9 (ecosystem services to economy), which underpins the natural capital rationale for development finance investment. Ecosystem extent accounts (TG-3.1 Assets) establish pre-project stocks of marine habitats such as coral reefs, mangroves, and seagrass meadows. Ecosystem condition accounts record baseline health metrics--coral cover percentages, mangrove regeneration rates, water quality indicators--that define the starting point for impact assessment. Physical flow accounts (TG-3.2 Flows from Environment to Economy) quantify provisioning services such as fish catch and regulating services such as coastal protection, measured in physical units (tonnes of fish, linear kilometres of shoreline protected). These baselines are essential for MDB appraisal methodologies, which require quantified evidence of the natural capital at risk or the ecosystem services that investments will protect or enhance.

Results measurement for monitoring frameworks: Flow accounts provide the monitoring data required by MDB results frameworks and vertical fund reporting requirements. Ocean economy thematic accounts (TG-2.5 Structure and Function of the Ocean Economy) track economic outcomes such as employment in sustainable fisheries or tourism revenues from marine protected areas. Investment indicators (TG-2.6 Ocean-related Investment) measure capital formation in ocean sectors, including gross fixed capital formation (GFCF) in vessels, port infrastructure, and aquaculture facilities, enabling tracking of whether development finance is catalysing additional private investment. Asset accounts document changes in natural capital stocks, revealing whether financed interventions are achieving their intended conservation or restoration outcomes. The time-series structure of Ocean Accounts enables before-and-after comparison essential for impact evaluation.

Risk assessment for financial structuring: Asset accounts quantify the natural capital stocks on which proposed investments depend, informing risk assessment. For example, coastal infrastructure investments depend on the coastal protection services provided by mangroves and reefs; if extent and condition accounts show declining trends in these ecosystems, this signals increased physical risk to project viability. Ocean economy accounts identify sectoral dependencies on ecosystem services--tourism depends on water quality and biodiversity, aquaculture depends on water quality and waste assimilation, fisheries depend on spawning habitat and nursery grounds. Quantifying these dependencies enables MDBs to assess nature-related risks to project cash flows, as required under the emerging frameworks for nature-related financial disclosure (TNFD, IFRS S1) discussed in Section 3.4 below.

Indicator reporting for policy targets: Ocean Accounts provide the source data for compiling indicators relevant to multilateral financing targets. SDG 14.7.1 (sustainable fisheries as proportion of GDP) can be derived from ocean economy thematic accounts by identifying the value added of sustainably managed fisheries relative to total GDP. SDG 14.5 (marine protected area coverage) can be reported from spatial extent accounts. GCF and GEF proposals increasingly require indicators on ecosystem condition, livelihoods, and climate adaptation benefits; Ocean Accounts provide the standardised measurement framework for compiling these indicators in a manner consistent with international statistical standards. For guidance on deriving these indicators, see TG-2.10 MEA Indicators.

3.2 Natural capital in project appraisal

The appraisal of development projects traditionally relies on cost-benefit analysis (CBA) to assess whether expected benefits exceed expected costs over the project lifetime. The SEEA Ecosystem Accounting (SEEA EA) framework, adopted as an international statistical standard in 2021, provides guidance on how ecosystem service values can be systematically incorporated into such analyses^[5]. Detailed guidance on valuation methods is provided in TG-1.9 Safe Usage of Monetary Valuation.

A common focus in project appraisal is cost-benefit analysis, "entailing the measurement of the expected effects, both positive and negative, of a particular project, activity or policy change. This type of analysis, when undertaken in the context of decision-making in the public sphere, requires a comparison of the wider social costs and benefits of a given project, activity, or policy"^[6]. Ocean Accounts provide baseline data on ecosystem condition and ecosystem service flows that can inform these comparisons.

The SEEA EA distinguishes between exchange values used in accounting (reflecting market prices or equivalent transaction values) and welfare values used in traditional cost-benefit analysis (reflecting total willingness to pay including consumer surplus). These two value concepts serve different purposes in development finance, and practitioners should be clear about which they are using and why. Both types of value have roles in development finance:

1. Exchange values from ecosystem accounts provide a conservative, transaction-based measure that is directly comparable with other economic statistics including GDP and national wealth accounts. These values are appropriate for national accounting purposes, for assessing the macroeconomic significance of ecosystem contributions, and for ensuring consistency with broader national accounts data submitted to MDBs.
2. Welfare values from complementary assessments provide a more comprehensive measure of total economic value that captures benefits to users beyond what they actually pay. MDB economic analysis guidance--including the World Bank's guidance on economic analysis of investment operations--typically requires welfare values for cost-benefit analysis because they reflect the full social benefits and costs relevant to public investment decisions.

In practice, practitioners preparing MDB project submissions should use welfare values as the primary basis for project-level cost-benefit analysis, consistent with standard MDB appraisal methodology, while referencing exchange values from the ecosystem accounts to establish the baseline asset stocks and service flows from which welfare-based assessments are conducted. The SEEA EA notes that "data from the ecosystem accounts can provide inputs to [externality] assessments through its recording of changes in ecosystem condition and changes in ecosystem services flows that arise as a result of a particular activity"^[7]. This complementary use of both value concepts ensures that project documentation is grounded in the accounting framework while meeting MDB appraisal requirements.

When preparing project documentation for MDB financing, practitioners should:

1. Use ecosystem accounts to establish baseline values for marine and coastal ecosystem assets in the project area
2. Use ecosystem service flow accounts to quantify the current value of services provided to beneficiaries
3. Apply net present value (NPV) approaches using appropriate discount rates to estimate changes in asset values under project scenarios
4. Present welfare values as the primary input to cost-benefit analysis, supplemented by exchange values from the accounts to demonstrate consistency with the national statistical framework

In the Ocean Accounts Framework (TG-0.1), these monetary flows between economic sectors and ocean assets correspond to Edge E3 (monetary flows between assets and economic sectors), which captures the financial transactions that development finance institutions seek to quantify and appraise. The SEEA Central Framework provides detailed guidance on NPV approaches to asset valuation, noting that the net present value "is the value of an asset determined by estimating the stream of income expected to be earned in the future and then discounting the future income back to the present accounting period"^[8]. This approach is directly applicable to valuing changes in ecosystem asset values under alternative project scenarios. For ecosystem assets, the choice of discount rate significantly affects valuations; the SEEA notes that "there is also support for the use of social discount rates in the valuation of environmental assets" given their "broad and long-term value to society as a whole"^[9].

3.3 Aligning with MDB environmental and social safeguards

Multilateral development banks operate under environmental and social safeguard policies that establish requirements for project assessment, stakeholder engagement, and impact mitigation. Ocean Accounts provide data that can demonstrate compliance with and strengthen performance under these safeguards.

The principal MDB safeguard frameworks include the World Bank Environmental and Social Framework (ESF), which comprises ten Environmental and Social Standards (ESSs) covering assessment and management of environmental and social risks; the Asian Development Bank Safeguard Policy Statement (SPS 2009); the African Development Bank Integrated Safeguards System (ISS); and the Inter-American Development Bank Environmental and Social Policy Framework. While these frameworks differ in detail and procedural requirements, they share common substantive requirements related to:

• Environmental assessment: Systematic evaluation of potential environmental impacts and identification of mitigation measures
• Biodiversity conservation: Protection of natural habitats, critical ecosystems, and species of conservation concern
• Climate resilience: Consideration of climate change impacts and adaptation requirements
• Sustainable use of natural resources: Ensuring that resource extraction does not exceed sustainable yields
• Indigenous peoples and local communities: Recognition of rights and meaningful consultation

Ocean Accounts organised under the SEEA framework directly address several of these requirements. Ecosystem extent accounts record the areas of different marine and coastal ecosystem types, providing baseline data for habitat protection targets. Ecosystem condition accounts track the state of ecosystems against reference benchmarks, enabling assessment of project impacts on ecosystem health. Asset accounts for fisheries and other biological resources record extraction relative to sustainable yields, demonstrating compliance with sustainable use requirements^[10].

MDB safeguard-account alignment

Table 1 summarises how specific MDB safeguard policy requirements can be verified using metrics from ocean account components. This alignment demonstrates that Ocean Accounts provide a structured evidence base for safeguard compliance, enabling practitioners to draw directly on compiled accounting data rather than undertaking separate ad hoc assessments for each safeguard requirement.

Table 1: MDB Safeguard-Account Alignment

In each case, the ocean account provides a standardised, repeatable measurement that can serve as the baseline for safeguard assessment and the monitoring indicator for safeguard compliance during project implementation. Condition accounts record changes against reference benchmarks, enabling environmental assessment requirements to be grounded in quantitative data. Extent accounts document habitat area by ecosystem type, directly supporting biodiversity conservation obligations. Residual flow accounts track pollutant discharges in physical units, providing the data needed to demonstrate pollution prevention performance. Asset accounts track extraction relative to regeneration for biological resources, demonstrating sustainable use.

The 2025 SNA identifies that "a related area of work is the assessment of enterprises' exposure to environmental risks, including climate risks and risks emerging from declines in nature and biodiversity. This work extends from assessing the physical risks to quantifying the financial risks to corporations, including through their supply chains"^[11]. Ocean Accounts provide the baseline information needed to conduct such assessments in the context of development projects.

For climate resilience, Ocean Accounts can document:

• The current extent and condition of coastal ecosystems that provide natural protection (mangroves, coral reefs, seagrass meadows)
• The value of coastal protection services under current conditions
• The exposure of coastal infrastructure and populations to climate-related hazards
• Projected changes in ecosystem service provision under climate scenarios

SDG 14 (Life Below Water) establishes international commitments to "sustainably manage and protect marine and coastal ecosystems to avoid significant adverse impacts, including by strengthening their resilience, and take action for their restoration in order to achieve healthy and productive oceans"^[12]. Ocean Accounts provide the structured data needed to demonstrate progress against SDG 14 targets, which increasingly feature in MDB results frameworks and country partnership strategies. For small island developing States (SIDS) and least developed countries (LDCs), SDG 14 specifically calls to "increase the economic benefits ... from the sustainable use of marine resources"^[13]--a target that Ocean Accounts can directly monitor. In the Ocean Accounts Framework (TG-0.1), these socio-economic benefits flowing from financed ocean activities to coastal communities correspond to Edge E5 (economic contributions to social conditions).

3.4 Monitoring, reporting and disclosure frameworks

The development finance landscape is increasingly shaped by requirements for sustainability monitoring, results reporting, and nature-related financial disclosure. Ocean Accounts can support compliance with these frameworks by providing structured, comparable data over time.

Sustainable finance classification: The 2025 SNA introduces guidance on measuring sustainable finance, including green bonds and sustainability-linked financial instruments. The 2025 SNA distinguishes ESG finance (encompassing environmental, social, and governance objectives) from green finance (limited to environmental improvement). It defines green finance as "finance for activities or projects that sustain or improve the condition of the environment"^[14]. Ocean Accounts provide the baseline and monitoring data needed to verify that financed activities achieve environmental improvements, supporting efforts to combat "greenwashing" concerns in sustainable finance markets.

The SNA notes that "to support assessments of the effectiveness of sustainable finance, it is relevant to present data on the levels of investment in ESG and green activities ... alongside data about the outcomes arising from that activity"^[15]. For ocean-related green bonds or blue bonds, ecosystem extent and condition accounts provide the outcome data against which the environmental effectiveness of financing can be assessed. Detailed guidance on compiling ocean investment indicators, including sustainable finance instruments, is provided in TG-2.6 Ocean-related Investment.

Nature-related financial disclosure: The Taskforce on Nature-related Financial Disclosures (TNFD) provides a framework for companies and financial institutions to report on nature-related dependencies, impacts, risks and opportunities^[16]. The TNFD recommendations are structured around four pillars--governance, strategy, risk management, and metrics and targets--that parallel the climate-related disclosures established under the Task Force on Climate-related Financial Disclosures (TCFD) and now incorporated into IFRS Sustainability Disclosure Standards^[17].

The TNFD notes that "nature risk, beyond climate change, is financial risk. Business as usual is no longer a viable option and nature must no longer be seen as a corporate social responsibility issue but a strategic risk management one"^[18]. For development finance, this means that MDBs and their borrowers increasingly need systematic data on nature-related risks and dependencies--exactly the type of information that Ocean Accounts provide.

TNFD-aligned reporting is currently voluntary for most MDB borrowers; no MDB has yet mandated full TNFD-aligned disclosure as a condition of financing. However, several MDBs are progressively integrating nature considerations into their operational requirements. The International Finance Corporation (IFC), for instance, has incorporated biodiversity and ecosystem service considerations into its Performance Standards, and the broader trend toward mandatory nature-related disclosure--driven by regulatory developments in the European Union, the United Kingdom, and other jurisdictions--suggests that voluntary adoption now will facilitate compliance as requirements evolve. Practitioners are advised to treat TNFD-aligned reporting as an emerging expectation that strengthens financing proposals, even where it is not yet formally required.

Ocean Accounts can support TNFD-aligned reporting by providing:

• Data on dependencies on ocean ecosystem services (regulating services such as coastal protection, provisioning services such as fisheries)
• Data on impacts on ocean ecosystems (pollution, habitat conversion, resource extraction)
• Baseline condition metrics against which nature-related risks can be assessed
• Physical and monetary indicators for target-setting and performance monitoring

IFRS sustainability disclosure: The International Sustainability Standards Board (ISSB) has established IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) as global baseline standards for sustainability reporting^[19]. The 2025 SNA notes that "these reporting requirements have been developed from initial work from the Financial Stability Board who developed the recommendations on climate-related disclosures and is extending to recommendations on nature-related disclosures"^[20].

IFRS S1 establishes that sustainability-related information is useful to primary users because "an entity's ability to generate cash flows over the short, medium and long term is inextricably linked to the interactions between the entity and its stakeholders, society, the economy and the natural environment throughout the entity's value chain"^[21]. For development projects, alignment with these disclosure frameworks enhances credibility with international investors and demonstrates that borrowing countries are building the data infrastructure needed for participation in global sustainable finance markets.

3.5 Application procedures for development finance institutions

This section provides a step-by-step procedure for development finance institutions and borrowing country agencies to use Ocean Accounts in preparing and appraising financing proposals. The procedure is structured around the typical MDB project cycle: identification, preparation, appraisal, approval, implementation, and evaluation.

Step 1: Identification phase--scoping the role of ocean natural capital

During the project identification phase, practitioners should determine whether ocean natural capital is material to the proposed investment. Key questions include:

• Does the project area include marine or coastal ecosystems recorded in national extent accounts?
• Do project activities depend on ocean ecosystem services (water supply, coastal protection, fisheries habitat)?
• Will project activities generate pressures on ocean environments (pollution, habitat conversion, resource extraction)?
• Are baseline data from Ocean Accounts available for the project location?

If Ocean Accounts have been compiled for the country, practitioners should consult spatial extent accounts (TG-3.1) to determine whether the project footprint overlaps with mapped marine or coastal ecosystem assets. If no spatial accounts are available, practitioners should identify whether the country has compiled at least national-level ecosystem extent and condition data that can inform the project design.

Step 2: Preparation phase--establishing baselines and dependencies

During project preparation, Ocean Accounts provide the baseline data required for MDB appraisal documentation. Practitioners should:

1. Extract baseline natural capital stocks: From ecosystem extent and condition accounts, extract the area and condition scores for ecosystem types within or adjacent to the project area. For example, for a coastal infrastructure project, document the extent of mangrove forests, seagrass meadows, and coral reefs within a defined buffer zone.

2. Quantify ecosystem service flows: From physical and monetary ecosystem service flow accounts (TG-3.2), quantify the provisioning, regulating, and cultural services currently provided by ocean ecosystems in the project area. For example, for a fisheries management project, document the current sustainable catch potential (tonnes per year), the value of that catch (monetary units), and the number of people dependent on fishing livelihoods.

3. Identify economic dependencies: From ocean economy thematic accounts (TG-2.5), identify the economic sectors active in the project area and their contribution to regional employment and GDP. This establishes the economic context for assessing project benefits.

4. Document environmental pressures: From residual flow accounts (TG-3.4), document current levels of pollution, waste discharge, and resource extraction that the project aims to address or that the project will generate.

Step 3: Appraisal phase--demonstrating economic rationale and safeguard alignment

During MDB appraisal, Ocean Accounts support the economic analysis and safeguard compliance documentation:

1. Economic analysis: Use NPV approaches to value ecosystem assets under alternative project scenarios (with-project versus without-project). For guidance on valuation methods, see TG-1.9. Present welfare values as the primary input to cost-benefit analysis, supplemented by exchange values from the ecosystem accounts to demonstrate consistency with national accounts. Document the discount rate used and justify its appropriateness for long-lived ecosystem assets.

2. Safeguard compliance: Use the account-safeguard alignment in Table 1 to populate safeguard screening tools and environmental and social impact assessments. For example, to demonstrate compliance with biodiversity safeguards, cite extent account data showing that the project area includes X hectares of critical habitat, and present the project design measures to avoid, minimise, or compensate for impacts on those habitats.

3. Results framework: Define project results indicators using metrics from Ocean Accounts. For example, an outcome indicator might be "area of mangrove habitat restored (hectares)" measured from extent accounts, and an impact indicator might be "coastal protection services provided (linear kilometres of shoreline)" measured from ecosystem service flow accounts.

Step 4: Implementation phase--monitoring and adaptive management

During project implementation, Ocean Accounts provide the monitoring data for results frameworks and safeguard compliance:

1. Annual monitoring: Update extent, condition, and flow accounts on an annual basis for the project area. Compare monitored values against the baseline established in Step 2 and the targets defined in the results framework.

2. Mid-term review: At mid-term, use time-series account data to assess whether the project is on track to achieve its natural capital targets. If condition accounts show declining trends in ecosystem health despite project interventions, this triggers adaptive management actions.

3. Safeguard monitoring: Report on safeguard indicators using account data. For example, if the safeguard framework requires reporting on water quality, use residual flow accounts to report nutrient loading (kg nitrogen per year) or biochemical oxygen demand.

Step 5: Evaluation phase--impact assessment and lessons learned

At project completion, Ocean Accounts enable rigorous impact evaluation:

1. Before-and-after analysis: Compare pre-project baselines (from Step 2) with post-project conditions (from Step 4) to assess the magnitude of change attributable to the project. Use statistical methods to control for confounding factors where possible.

2. Attribution analysis: Use the integrated structure of Ocean Accounts to trace impacts through the system. For example, if the project restored mangroves, document the change in mangrove extent (from extent accounts), the change in fish biomass in associated waters (from asset accounts), and the change in fisheries livelihoods (from ocean economy accounts).

3. Cost-effectiveness assessment: Compare the cost per unit of ecosystem service provided or natural capital restored against alternative approaches. For example, calculate the cost per hectare of mangrove restored, and compare against the cost of equivalent grey infrastructure for coastal protection.

3.6 Worked example: Blue bond impact report using ocean accounting data

This example demonstrates how a national government or subnational entity can use Ocean Accounts to prepare an annual impact report for blue bond investors, satisfying both use-of-proceeds verification and key performance indicator (KPI) monitoring requirements.

Context: A coastal state has issued a USD 100 million blue bond to finance ocean conservation and sustainable blue economy development. Bond proceeds are allocated to three use-of-proceeds categories: marine protected area management (40 per cent), sustainable fisheries infrastructure (35 per cent), and coastal ecosystem restoration (25 per cent). The bond covenants require annual reporting on use of proceeds and performance against KPIs.

Use-of-proceeds verification using Ocean Accounts: Ocean Accounts provide the data infrastructure to verify that bond proceeds are directed to eligible activities:

1. Marine protected area management: Government expenditure accounts (TG-1.1 Section 3.3) classify ocean-related public expenditure by function, including expenditure on protected area management under the Classification of the Functions of Government (COFOG) 05.4 (Protection of biodiversity and landscape). The government reports that USD 40 million of bond proceeds were disbursed to protected area management agencies, verifiable against budget execution records. Extent accounts (TG-3.1) document that the funded protected areas cover 1.2 million hectares of marine ecosystems, including coral reefs, seagrass meadows, and pelagic zones.

2. Sustainable fisheries infrastructure: Investment accounts (TG-2.6 Section 3.3) track gross fixed capital formation (GFCF) in ocean industries by asset type. The government reports that USD 35 million of bond proceeds financed capital investments in fisheries monitoring systems, cold chain infrastructure, and vessel upgrades, recorded under GFCF in machinery and equipment and transport equipment. Physical supply and use tables (TG-3.2) document that the funded infrastructure serves fisheries extracting 45,000 tonnes of fish per year from stocks assessed as within biologically sustainable levels.

3. Coastal ecosystem restoration: Environmental protection expenditure accounts (SEEA CF Chapter IV) track expenditure on environmental protection purposes, including ecosystem restoration under COFOG 05.4. The government reports that USD 25 million of bond proceeds financed mangrove and seagrass restoration activities. Extent accounts document that the funded restoration activities increased mangrove extent by 3,200 hectares and seagrass extent by 1,800 hectares.

KPI monitoring using Ocean Accounts: The blue bond covenants define four KPIs, each linked to specific ocean accounting data sources:

KPI 1: Biodiversity conservation (target: maintain or improve coral reef health): Condition accounts (TG-2.1) provide the data source. The government reports that coral cover within funded marine protected areas was 32 per cent at bond issuance (baseline year) and 35 per cent in the reporting year, measured through standardised reef monitoring surveys compiled into the condition accounts. This represents a 3 percentage point improvement, meeting the KPI target. The data are compiled annually, enabling time-series monitoring of reef health.

KPI 2: Water quality (target: reduce nutrient loading by 10 per cent): Residual flow accounts (TG-3.4) track emissions to water bodies in physical units. The government reports that nitrogen loading to coastal waters in the project areas was 1,200 tonnes per year at baseline and 1,050 tonnes per year in the reporting year, representing a 12.5 per cent reduction. This exceeds the KPI target and is attributed to improved wastewater treatment funded by bond proceeds. The data are compiled quarterly and aggregated to annual figures for bondholder reporting.

KPI 3: Blue carbon sequestration (target: sequester 50,000 tonnes CO2-equivalent per year): Carbon stock accounts (SEEA CF Chapter 3) measure carbon storage in biomass and soils for coastal ecosystems. The government reports that the 3,200 hectares of restored mangroves and 1,800 hectares of restored seagrass funded by bond proceeds sequester an estimated 48,000 tonnes CO2-equivalent per year, based on carbon sequestration rates from TG-6.2 Mangrove and Coastal Wetland Accounting and TG-6.3 Seagrass Ecosystem Accounting. While slightly below the target in the first reporting year, the government notes that sequestration rates will increase as restored ecosystems mature.

KPI 4: Fishing employment (target: maintain or increase formal employment in sustainable fisheries): Ocean economy thematic accounts (TG-2.5 Table 3.2) track employment by ocean industry, including marine fishing and aquaculture. The government reports that formal employment in marine fishing was 32,000 persons at baseline and 33,500 persons in the reporting year, representing a 4.7 per cent increase. The increase is attributed to improved fisheries management and infrastructure that reduced post-harvest losses and increased the economic viability of small-scale fisheries. Employment data are sourced from labour force surveys and compiled into the economic activity accounts.

Outcome data presentation: Table 2 presents the KPI performance data in a format suitable for inclusion in the annual blue bond impact report.

Table 2: Blue Bond KPI Performance (Reporting Year 1)

Lessons learned: This worked example demonstrates that Ocean Accounts provide a complete data infrastructure for blue bond impact reporting, addressing both use-of-proceeds verification and KPI monitoring within a single integrated framework. The accounting structure ensures consistency over time, comparability across reporting entities, and alignment with international statistical standards. Practitioners preparing blue bond documentation can specify Ocean Accounts as the data source for impact metrics during bond structuring, ensuring that monitoring systems are in place before bond issuance. For detailed guidance on structuring blue bonds and other project-level finance instruments, see TG-1.8 OA and Project-Level Finance.

3.8 Accounts as Data Pipeline to Capital

Ocean Accounts serve four distinct functions in creating a data pipeline from structured environmental-economic information to investable capital. Understanding these functions helps practitioners design accounting programmes that directly support finance mobilisation, rather than treating accounts as stand-alone statistical products.

Function 1: Baseline valuation. Before any ocean-related investment can be appraised, investors require a credible estimate of the natural capital stock at risk or under management. Ocean Accounts provide this through ecosystem extent accounts (measuring the area and spatial configuration of marine and coastal ecosystems), ecosystem condition accounts (documenting the quality of those ecosystems against reference benchmarks), and monetary asset accounts (estimating the net present value of expected ecosystem service flows). These three account types, compiled according to SEEA EA standards, produce the baseline valuation that anchors investment decisions. Without such baselines, project proponents must rely on ad hoc studies that lack comparability and are difficult for institutional investors to benchmark across jurisdictions.

Function 2: Risk assessment. Financial institutions increasingly recognise nature-related risks as material to portfolio performance. Ocean Accounts support risk assessment by documenting trends in ecosystem condition over time, identifying dependencies between economic activities and ecosystem services through supply and use tables, and quantifying the economic exposure of sectors to ecosystem degradation. When accounts show declining coral reef condition alongside high tourism sector dependency on reef-based recreation services, the risk signal is clear and quantified. This function aligns directly with the TNFD risk assessment approach (see Section 3.4 above) and provides the structured data that underlies TNFD's LEAP assessment process.

Function 3: Standardised impact indicators. Investors require impact metrics that are comparable across projects, jurisdictions, and time periods. Ocean Accounts produce such indicators because they follow internationally agreed classifications and measurement boundaries. Ecosystem extent change (hectares of mangrove restored), condition improvement (water quality index relative to baseline), and service flow enhancement (tonnes of carbon sequestered per year) are all derivable from standard account tables. Section 3.10 below provides detailed templates for aligning these account-derived indicators with TNFD, IFRS S1/S2, and CBD Target 15 reporting requirements.

Function 4: Post-investment monitoring. After capital has been deployed, ongoing monitoring determines whether environmental outcomes are being achieved and whether financial instrument covenants are being met. Ocean Accounts provide the monitoring infrastructure through time-series compilation of the same accounts used for baseline valuation. Because accounts use consistent classifications and spatial boundaries over time, they enable rigorous before-after comparison without the methodological discontinuities that plague ad hoc monitoring approaches. Section 3.11 below addresses the design of post-investment monitoring programmes using account time series.

These four functions operate sequentially in the investment lifecycle but require parallel planning. Practitioners should design their accounting programmes with all four functions in mind from the outset, ensuring that baseline accounts are structured to support subsequent risk assessment, impact reporting, and monitoring. For detailed guidance on connecting these functions to project-level finance instruments, see TG-1.8 OA and Project-Level Finance.

3.9 Investment-Readiness Criteria for Nature-Based Solutions

Nature-based solutions (NBS) for ocean and coastal environments represent a growing category of investable projects, but many promising NBS proposals fail to attract finance because they lack the structured evidence base that investors require. This section provides guidance on the minimum information requirements for NBS investment readiness and shows how Ocean Accounts supply that information.

NBS typology for ocean contexts. Ocean-related NBS can be categorised into three broad types, each with distinct accounting requirements:

Minimum evidence requirements. For any NBS proposal to be considered investment-ready, the following information should be available from Ocean Accounts or compilable from existing account data:

1. Baseline ecosystem extent: Current area of the target ecosystem type, compiled from ecosystem extent accounts using the IUCN Global Ecosystem Typology classifications described in TG-3.1 Asset Accounts
2. Baseline ecosystem condition: Current condition of the target ecosystem relative to reference condition, using the condition indicators and reference frameworks described in TG-2.1 Aggregate Biophysical Indicators of Environmental State
3. Service flow quantification: Estimated annual flow of ecosystem services from the target ecosystem, in both physical and monetary terms
4. Counterfactual scenario: Projected ecosystem trajectory in the absence of NBS intervention, based on historical trends in extent and condition accounts
5. Outcome targets: Quantified targets for extent, condition, and service flow improvements over the investment horizon
6. Monitoring plan: Schedule and methodology for ongoing account compilation to track outcomes against targets

Projects that can demonstrate all six evidence requirements using Ocean Account data are substantially more likely to attract finance than those relying on bespoke assessments. The accounting framework provides the consistency and credibility that institutional investors demand.

Connecting NBS to finance instruments. Different NBS types align with different financial instruments. Restoration projects typically suit results-based payment mechanisms (including blue carbon credits and performance-based grants) because outcomes can be measured through extent and condition account changes. Protection projects align with sovereign commitments (including debt-for-nature swaps) where the maintenance of ecosystem condition is the key deliverable. Sustainable management projects can support blue bonds and sustainability-linked loans where KPIs are derived from supply and use table metrics such as extraction rates relative to maximum sustainable yield. For detailed guidance on these instrument types, see TG-1.8 OA and Project-Level Finance.

3.10 Standardised Impact Indicator Templates

Investors, regulators, and disclosure frameworks increasingly demand standardised impact indicators that can be compared across projects and portfolios. This section provides templates for deriving impact indicators from Ocean Accounts that satisfy the requirements of three major frameworks: the Taskforce on Nature-related Financial Disclosures (TNFD), the IFRS Sustainability Disclosure Standards (S1 and S2), and the Convention on Biological Diversity (CBD) Global Biodiversity Framework Target 15.

TNFD-aligned indicators. The TNFD recommends disclosure of dependencies and impacts on nature across four realms (land, ocean, freshwater, atmosphere). For ocean contexts, Ocean Accounts provide direct measurement of the core TNFD metrics:

IFRS S1/S2-aligned indicators. IFRS S1 requires disclosure of sustainability-related risks and opportunities that could reasonably be expected to affect an entity's cash flows, access to finance, or cost of capital. IFRS S2 addresses climate-related disclosures specifically. Ocean Accounts support these disclosures by providing:

CBD Target 15 indicators. CBD Target 15 requires that large and transnational businesses and financial institutions regularly monitor, assess, and transparently disclose their risks, dependencies, and impacts on biodiversity. Ocean Accounts provide the measurement infrastructure for Target 15 compliance by enabling businesses to:

• Identify and quantify dependencies on marine biodiversity using ecosystem service supply and use tables
• Monitor impacts on marine ecosystems through changes in extent and condition accounts
• Report on risks using monetary asset accounts that translate biodiversity loss into financial exposure
• Disclose progress against nature-positive commitments using standardised account-derived metrics

Template for integrated impact reporting. Practitioners preparing impact reports for ocean-related investments can use the following template structure, with each metric sourced directly from Ocean Account tables:

This template ensures that all impact metrics are traceable to internationally standardised account tables, providing the auditability and comparability that investors require. For guidance on compiling the underlying ecosystem extent and condition accounts, see TG-3.1 Asset Accounts and TG-2.1 Aggregate Biophysical Indicators of Environmental State.

3.11 Post-Investment Ecosystem Monitoring

Once capital has been deployed for ocean-related projects, ongoing monitoring is essential to verify that environmental outcomes are being achieved, that financial instrument covenants are being met, and that adaptive management can respond to changing conditions. Ocean Accounts provide the monitoring infrastructure through time-series compilation of ecosystem extent, condition, and service flow accounts.

Time-series accounts for monitoring. The fundamental advantage of using Ocean Accounts for post-investment monitoring is that the same measurement framework applies at baseline, during implementation, and at project completion. This eliminates the methodological discontinuities that arise when different consultants use different methods at different project stages. Time-series accounts should be compiled at intervals aligned with financial reporting cycles -- typically annually for ecosystem extent and service flow accounts, and at least every two to three years for condition accounts that require more intensive field data collection.

Before-After-Control-Impact (BACI) design. Rigorous impact assessment requires comparison not only before and after an intervention but also between intervention sites and control sites. Ocean Accounts support BACI design by enabling compilation of accounts for both the project area and comparable reference areas. The ecosystem extent and condition accounts for control sites provide the counterfactual against which project outcomes are evaluated. This design is particularly important for nature-based solutions where background environmental trends (climate change, upstream pollution) may affect ecosystems independently of the project intervention.

Key elements of a BACI monitoring programme using Ocean Accounts include:

1. Spatial delineation: Define project area and control area boundaries using the spatial units described in TG-3.1 Asset Accounts
2. Temporal schedule: Compile accounts for at least two pre-intervention periods and at regular intervals during and after intervention
3. Indicator selection: Choose condition indicators that are responsive to the intervention type (e.g., coral cover for reef restoration, vegetation density for mangrove planting)
4. Statistical analysis: Compare the difference in account values between project and control sites before and after intervention
5. Attribution: Document how the BACI design supports attribution of observed changes to the financed intervention rather than to background trends

Reporting cycles and adaptive management. Post-investment monitoring should align with the reporting requirements of the specific financial instrument. Blue bonds typically require annual impact reports. Debt-for-nature swaps may require biennial or triennial assessments. Results-based payment mechanisms require verification at each payment milestone. In all cases, the monitoring programme should specify:

• Which account tables will be compiled at each reporting point
• What data sources will be used (remote sensing, field surveys, administrative records)
• What quality assurance procedures will be applied, consistent with the official statistics principles described in TG-0.2 Overview of Relevant Statistical Standards
• How monitoring results will feed back into adaptive management decisions
• How deviations from expected trajectories will be reported to investors and what corrective actions will be triggered

The regular compilation of accounts also creates a valuable longitudinal dataset that can inform future investment decisions, contribute to national reporting on SDG 14 indicators, and support meta-analyses of NBS effectiveness across projects and jurisdictions.

3.12 Ecosystem Assets in Fiscal Frameworks

Ocean ecosystem assets represent a significant component of sovereign natural capital that is increasingly relevant to fiscal policy, sovereign debt management, and public finance decisions. This section provides guidance on incorporating ocean ecosystem asset values into fiscal frameworks, building on the monetary asset valuation methods described in this Circular and in TG-1.9 Safe Usage of Monetary Valuation.

Sovereign natural capital. The 2025 SNA recognises that natural capital -- including environmental assets and ecosystem assets -- forms part of a country's wealth. For countries with significant ocean territories, marine ecosystem assets may constitute a substantial share of national wealth. Monetary ecosystem asset accounts, compiled using net present value methods applied to expected ecosystem service flows, provide estimates of ocean natural capital that can be incorporated into sovereign balance sheets. These estimates inform fiscal policy by revealing the extent to which current economic activity depends on the drawdown of natural capital stocks and whether that drawdown is sustainable.

Blue bonds and sovereign borrowing. Sovereign blue bonds are debt instruments whose proceeds are earmarked for ocean-related expenditures that maintain or enhance marine ecosystem assets. Ocean Accounts provide the evidence base for blue bond issuance in several ways:

• Monetary ecosystem asset accounts demonstrate the value of the natural capital that blue bond proceeds will protect or restore
• Ecosystem service flow accounts quantify the annual economic benefits that depend on maintaining ocean ecosystem condition
• Time-series accounts provide the monitoring data needed for blue bond impact reporting
• Depletion accounts reveal the fiscal cost of ecosystem degradation, strengthening the case for preventive investment

Countries considering blue bond issuance should compile ocean ecosystem asset accounts as part of their bond preparation, ensuring that the use-of-proceeds framework is grounded in standardised natural capital data. For detailed guidance on blue bond structuring and other project-level instruments, see TG-1.8 OA and Project-Level Finance.

Natural capital in fiscal risk assessment. Fiscal risk assessments increasingly recognise that degradation of natural capital can affect government revenues (through reduced economic activity in nature-dependent sectors), increase government expenditures (through disaster response and adaptation costs), and create contingent liabilities (through environmental remediation obligations). Ocean Accounts quantify these fiscal risks by tracking changes in ecosystem asset values over time and linking those changes to economic sector performance through supply and use tables.

Integration with public financial management. To be effective, ocean ecosystem asset information must be integrated into existing public financial management processes. This includes incorporating natural capital considerations into medium-term fiscal frameworks, budget preparation guidelines, and public investment appraisal criteria. Finance ministries can use ecosystem asset accounts to evaluate whether proposed infrastructure investments will enhance or degrade natural capital, and to compare the life-cycle costs of nature-based solutions against conventional infrastructure alternatives. This integration supports the broader objective of ensuring that fiscal policy accounts for the full range of assets -- produced, financial, human, and natural -- that underpin long-term economic prosperity.

3.13 South-South Finance Exchange Mechanisms

Many countries implementing Ocean Accounts face similar challenges in mobilising finance for ocean sustainability. South-South exchange mechanisms enable countries to share experiences, transfer practical knowledge, and develop common approaches to account-based finance mobilisation. This section provides guidance on establishing and participating in such exchange mechanisms.

Peer learning for account-finance integration. Countries that have successfully used Ocean Accounts to support finance mobilisation can share their experience with countries at earlier stages of implementation. Effective peer learning involves structured exchanges focused on specific aspects of the account-finance pipeline: how accounts were compiled, how they were presented to financial institutions, what investor feedback was received, and how account products were refined in response. The GOAP network provides a platform for such exchanges, and participating countries are encouraged to document their experiences in standardised formats that facilitate cross-country learning.

Standardised templates for finance proposals. One practical output of South-South exchange is the development of standardised templates for finance proposals that incorporate Ocean Account data. These templates reduce the transaction costs of preparing finance documentation and ensure that account data are presented in formats that investors and MDBs recognise. Key template elements include:

Regional cooperation on account compilation. For transboundary marine ecosystems (shared fisheries, migratory species corridors, large marine ecosystems), coordinated account compilation across countries strengthens the collective evidence base for regional finance proposals. Regional development banks and multilateral funds increasingly favour programmatic approaches that address transboundary challenges, and harmonised Ocean Accounts across participating countries provide the coordinated data infrastructure that such programmes require.

Knowledge exchange formats. Effective South-South exchange can take several forms, each suited to different learning objectives:

• Technical workshops: Hands-on training in account compilation and finance application, typically hosted by a country with implementation experience
• Study tours: Visits to countries that have successfully used accounts to mobilise finance, allowing direct observation of institutional arrangements and data systems
• Twinning arrangements: Long-term partnerships between countries at different stages of implementation, with regular exchange of staff and knowledge
• Online communities of practice: Ongoing platforms for sharing templates, methodologies, and lessons learned across the GOAP network

Countries participating in South-South exchange are encouraged to contribute to the collective knowledge base by documenting both successes and challenges, enabling iterative improvement of account-finance integration approaches across the network.

3.14 Case applications

The following illustrative examples demonstrate how Ocean Accounts can be applied in multilateral development finance contexts. These are stylised applications intended to show the range of use cases; as implementation experience from GOAP partner countries accumulates, future versions of this Circular will incorporate empirical case studies.

Application 1: Coastal resilience infrastructure financing

A coastal state seeks financing from an MDB for integrated coastal protection that combines grey infrastructure (sea walls, drainage) with nature-based solutions (mangrove restoration, coral reef rehabilitation). Ocean Accounts support the financing proposal by:

• Documenting current mangrove and coral reef extent through ecosystem extent accounts
• Quantifying coastal protection services currently provided through ecosystem service flow accounts
• Valuing ecosystem assets using NPV approaches to demonstrate natural capital at risk
• Establishing monitoring baselines for both ecosystem condition and service provision
• Demonstrating alignment with SDG 14 targets on coastal ecosystem resilience

The ecosystem accounts enable comparison of full project benefits (including nature-based components) against a conventional grey-infrastructure-only alternative, potentially demonstrating superior cost-effectiveness and co-benefits. For project-level implementation details, see TG-1.8 OA and Project-Level Finance.

Application 2: Sustainable fisheries programme

An MDB considers financing a comprehensive fisheries management programme including stock assessment, monitoring and surveillance, market access improvements, and community development. Ocean Accounts inform the programme design by:

• Recording current fish stock levels through asset accounts for aquatic biological resources
• Documenting extraction relative to maximum sustainable yield through physical supply and use tables
• Identifying the economic contribution of fisheries through ocean economy thematic and extended accounts
• Mapping the geographic distribution of fishing activity and coastal community dependence
• Projecting stock recovery trajectories under improved management scenarios

The asset accounts demonstrate that current depletion exceeds sustainable levels, providing economic justification for management investment. The 2025 SNA treatment of depletion as a cost of production means that unsustainable extraction is now reflected in reduced net national income, strengthening the fiscal case for intervention^[22].

Application 3: Blue economy development

A regional development bank supports a multi-sector blue economy programme spanning marine tourism, sustainable aquaculture, and renewable ocean energy. Ocean Accounts provide the integrated information base by:

• Measuring the baseline contribution of each sector through ocean economy thematic and extended accounts
• Identifying spatial conflicts and synergies among ocean uses
• Documenting ecosystem service dependencies (tourism depends on water quality and biodiversity; aquaculture depends on water quality and waste assimilation)
• Establishing condition metrics for the marine ecosystems that underpin economic activities
• Supporting spatial planning to optimise across multiple objectives

The accounts enable results-based monitoring that tracks both economic and environmental outcomes, demonstrating to financiers that blue economy growth is occurring within ecological limits.

Application 4: Climate adaptation fund proposal

A small island developing state (SIDS) seeks financing from the Green Climate Fund for climate adaptation investments. Ocean Accounts strengthen the proposal by:

• Documenting the economic dependence on ocean-related activities (fisheries, tourism, maritime transport)
• Quantifying natural capital stocks at risk from climate change impacts (coral reef bleaching, sea level rise, ocean acidification)
• Valuing ecosystem services that provide natural adaptation benefits (coastal protection, carbon sequestration)
• Establishing vulnerability indicators linking ecosystem condition to economic outcomes
• Providing the monitoring framework for results-based payment arrangements

SDG 14 target 14.7 (see Section 3.3 above) calls on countries to increase economic benefits from sustainable marine resources. Ocean Accounts provide the data infrastructure to measure progress against this target and to demonstrate the climate rationale for ocean investments.

4. Acknowledgements

This Circular has been prepared as a draft for review and comment. Final approval will follow the GOAP Technical Experts Group procedures.

Authors: [To be confirmed]

Reviewers: [To be confirmed]

5. References