Blue Abadi Initiative: Year 3 Annual Report

The program aims to utilize financial resources to ensure that marine ecosystems and species in the BHS are sustainably managed and protected by local environmental stewards, providing benefits for local communities. The USAID contribution to the Blue Abadi Initiative is used to capitalize the sinking fund portion of the Blue Abadi Fund and provides essential resources to support crucial activities under the two objectives in the initial years of Blue Abadi. Grant management is a critical component of the Blue Abadi Initiative. Since the signing of the Grant Agreement with CI in July 2017, KEHATI has selected and signed eight (8) grant agreements for Cycle-1 primary grants for implementation during an 18-month period, with activities that align with the Blue Abadi Fund objectives and strategies. The total commitment for this first Cycle of primary grants was IDR 26,201,814,723 or equal to USD $2,000,138. In April 2018, KEHATI signed sixteen (16) grant agreements for INOVASI Grants with a total commitment of IDR 2,547,587,500 or equal to USD 194,472. The Blue Abadi Fund is comprised of two funds: a sinking fund, which serves as a bridge to allow near-term fund distributions, and an endowment for long-term capitalization. With a capitalization target of USD $32 million, to date, the Blue Abadi Fund has secured USD $23.4 million in investment through the generous contributions of key philanthropic and public agencies. Of the total funds raised, USAID invested USD $5 million in sinking funds to the Blue Abadi Fund, and other donors invested a total of USD $18.4 million for the Blue Abadi Fund's endowment. As of December 31, 2020, c. USD $16.4 million of that total had been transferred to Blue Abadi's endowment account. The Blue Abadi Fund's total portfolio value as at the end of December 2020 was USD $18,073,486, mainly comprised of equities (50.3%) and bonds (29.3%). In general, the global financial market had started to recover from the crisis caused by the COVID-19 pandemic. Since inception (January 2018), the BAF investment portfolio has generated a 4.3% return. In Year 3, CI and TNC were started to explore the possibility for BAF to access debt-for-nature swap under the US Tropical Forest and Coral Reef Conservation Act (TFCCA) program. The Blue Abadi Initiative has made significant progress in achieving its objectives. The program has supported the implementation of crucial activities, including the selection and signing of grant agreements, the disbursement of funds, and the management of the Blue Abadi Fund. The program has also generated a 4.3% return on investment since inception, demonstrating its potential for long-term sustainability. The exploration of debt-for-nature swap under the TFCCA program is a promising initiative that could further support the program's objectives.