Indonesia’s Blue Bonds: Diving into New Waters

This case follows the Republic of Indonesia as it considered issuing its first blue bond to support its sustainable marine initiatives. The case puts students in the role of a team evaluating three potential markets for the issuance: US dollar (USD), euro (EUR), and Japan’s samurai bond market. Indonesia had built a strong track record in the USD and EUR markets, with multiple successful green and SDG bond issuances since 2018. Meanwhile, the samurai market presented a less conventional but potentially strategic opportunity. However, Japan’s conservative investor profile, which preferred plain-vanilla structures, and its limited secondary market liquidity presented trade-offs. The team faces a complex task to evaluate whether, how, and where Indonesia should launch its first blue bond.