Sharia Financial Innovation in Blue Economy Development: A Study of Green Sukuk Potential in Indonesia

Abstract

Sustainable blue economy development has become a global priority in preserving marine ecosystems while improving the welfare of coastal communities. As an archipelagic country with abundant marine resources, Indonesia faces significant funding challenges for environmentally friendly ocean-based projects. Amid limited conventional financing options, Sharia financial innovation—particularly green sukuk—emerges as a potential instrument to support the funding of blue economy projects. This article aims to analyze the potential of Sharia green sukuk as an alternative financing solution in Indonesia’s blue economy development and evaluate the enabling and inhibiting factors in its implementation. This study employs a descriptive qualitative method through literature review and document analysis of Indonesia's green sukuk issuances from 2018 to 2024. The analysis reveals that Sharia green sukuk has strategic potential in financing marine projects such as mangrove restoration, ocean waste management, and marine-based renewable energy development. The strengths of this instrument lie in its compliance with Islamic principles and alignment with the Sustainable Development Goals (SDGs). However, implementation in the context of the blue economy remains limited due to a lack of bankable project pipelines, low awareness among project implementers, and regulatory gaps that hinder the integration of Islamic finance and marine sectors. This study recommends enhancing synergy between financial authorities, related ministries, and Sharia financial institutions to develop viable Sharia-compliant blue economy projects. Moreover, increasing public literacy and technical capacity of project actors is essential to enable green sukuk to serve as a key catalyst for inclusive and sustainable blue economy development in accordance with Islamic values.