At Mumbai Climate Week 2026, I had the opportunity to deliver a short special address on blue financing for urban coastal resilience. The discussion brought together leaders from finance, development institutions, and coastal economies across Asia and beyond.
One theme was unmistakable:
We are not short of awareness.
We are short of structure.
Coastal cities like Mumbai, Manila, Colombo and Jakarta are not abstract climate frontlines. They are economic engines exposed to climate volatility. Rising sea levels, flooding, storm surge and ecosystem degradation are already translating into recurrent fiscal stress, contingent liabilities, and rising insurance costs.
The question is no longer why we need coastal resilience.
It is how we make it investable.
The Adaptation Finance Gap Is a Structuring Gap
Namita Vikas (auctusESG) opened the session by highlighting a persistent imbalance: adaptation remains underfunded compared to mitigation. Investors worry about returns, replicability, currency risk and policy uncertainty. There is a structural bias toward mitigation assets with clearer revenue models.
But this is not a capital scarcity issue. It is a risk architecture issue.
Adaptation struggles because revenue streams are less obvious. The breakthrough comes when avoided loss becomes fiscally visible — in sovereign balance sheets, insurance pricing and municipal credit risk assessments.
If resilience reduces volatility, it has financial value.
Climate Risk Is Already Financial Risk
Jo Ann Eala (Bank of the Philippine Islands) underscored that climate events are not theoretical. Banks are increasingly developing tools to measure exposure to physical risks.
This is where blue finance intersects with prudential logic.
Mangroves, wetlands and coastal buffers are not just environmental amenities, they are protective infrastructure. When risk reduction can be measured and linked to lower expected losses or improved fiscal stability, resilience becomes credit-relevant.
This shifts adaptation from a grant-funded environmental concern to a core financial stability issue.
Capital Will Move — If Policy and Pipeline Align
Karanraj Chaudri (UNDP) emphasised three preconditions for capital shifts:
- Credible policy direction
- Investable pipeline
- Risks structured in a manageable way
Without these, even well-intentioned capital stays sidelined.
He referenced models such as the Global Fund for Coral Reefs, which blends concessional and commercial capital to de-risk ocean-positive enterprises. Development finance institutions play a catalytic role; not as permanent funders, but as market shapers.
Blue finance must be integrated into national resilience plans, not treated as a standalone environmental strategy. When coastal resilience shows up in debt sustainability analysis, climate strategies and development plans, financial markets respond.
The Aspiration–Allocation Gap
Derry Wanta (Indonesia Blue Economy Centre) highlighted a persistent gap between aspiration and budget allocation. National blue economy plans exist, but fiscal barriers at national, regional and village levels often prevent implementation.
This reflects a common challenge in Emerging Markets and Developing Economies (EMDEs): pipeline development and project preparation capacity can be more binding than capital constraints.
He also raised a critical structural issue: temporal mismatch. Mangrove restoration may generate long-term resilience benefits, but financing horizons are often five years or less.
Blue finance instruments must better align ecological timelines with capital timelines.
Packaging Risk and Opportunity
Karthik Iyer (Blue Bond Accelerator) stressed a simple but often overlooked point: investors do not invest in narratives. They invest in risk-adjusted returns.
The language barrier matters. The packaging matters. Visibility of actual returns matters.
Co-benefits—blue, green and social—can strengthen the investment case, but only if they are structured credibly. The risk of “force-fitting” blue labels onto unsuitable instruments is real.
Examples such as fisheries licensing reform in Nauru demonstrate that when governance reform aligns with revenue structures, ocean-linked sectors can become self-financing.
Bundling, blended finance and currency-risk mitigation structures, such as omnibus vehicles, are often more decisive than the colour of the bond.
Beyond Blue Bonds: Trust, Standards and Credibility
Vidarsha Dharmasena (DFCC Bank, Sri Lanka) highlighted the importance of broader GSS+ (Green, Social, Sustainability and beyond) bonds, national taxonomies and stock exchange standards. Confidence and transparency are preconditions for scaling.
Standards reduce transaction cost and signal credibility, but they do not create returns on their own.
Blue finance must sit within credible governance frameworks to avoid bluewashing risk.
Toward a Resilience Market
Rolando Morillo (Equilibrium Climate Capital) emphasised that bankability requires measurable revenue structures and alignment with government policy. Regional approaches can help achieve scale beyond city-by-city fragmentation.
He introduced an important concept: resilience as a service.
If resilience generates predictable payments and investment-grade cash flows, a resilience market can emerge. But this requires regulatory clarity, policy alignment and credible data.
What Needs to Shift
Across the discussion, a few structural shifts became clear:
- Move from labels to architecture
- Price avoided loss and risk reduction
- Integrate coastal resilience into sovereign fiscal frameworks
- Strengthen project preparation and aggregation
- Align ecological timelines with financial timelines
- Address currency and policy risk explicitly
- Build credible data foundations
Blue finance is not about creating more instruments.
It is about embedding coastal ecosystems into infrastructure finance, municipal balance sheets and development planning.
When mangroves are treated as assets rather than amenities, the capital conversation changes.
And when avoided loss becomes measurable and credit-relevant, adaptation shifts from aspiration to allocation.
The opportunity now is to move from narrative momentum to structural implementation, particularly in emerging market and developing economy contexts where coastal risk and economic vulnerability intersect most sharply.
Blue finance can help bridge that gap.
But only if we design it with discipline.